Group's value plummets £176m after profits warning

Advertising group Cordiant Communications today saw millions wiped from its stock market value after they warned that profits would take a knock in the aftermath of the US terrorist attacks.

The group - which revealed only last month that revenues had been held back by the slowing economy - said trading conditions in its industry were the ‘‘most difficult experienced in recent years’’.

It said the downturn in marketing spending in North America had spread to Europe and Asia Pacific, while in addition the terrorist events in North America had led to projects and campaigns being cancelled.

‘‘Consequently it is more difficult to predict the outcome for the year,’’ the group said.

‘‘However, current indications are that underlying revenues for the year as a whole will show a decline of approximately 5%, resulting in a significant reduction in profitability.’’

To counter the tough conditions, the group is axing staff, and in August said it expected severance costs this year would cost it £10m as it trimmed an unspecified number of people from its 10,000 workforce worldwide.

It said today its cost saving programme was on track although in the light of current circumstances it was in the process of ‘‘re-evaluating its cost base targets’’.

Shares in Cordiant slumped a massive 46% in early trading today, falling 44p to 51½p - wiping £176m from its market value.

It is now valued at just over £200m while shares are worth just a fraction of the 406p high they touched last year.