Marketing sector share prices fall amid "Brexit" fears

BLOCKLEY, U.K. - June 14, 2016 - PRLog -- The price of shares in all but two of the 17 marketing companies listed on the London stock exchange have fallen since last weekend as investors weighed up the possibility of a "Brexit" vote. Shares in the remaining two companies were unchanged.

According to the marketing industry publication Marketing Services Financial Intelligence, companies with a large proportion of revenue derived from abroad would be expected to be most susceptible to Brexit jitters. Among them are Ebiquity, Huntsworth and WPP [see chart].

However, shares in some other companies with a large reliance on overseas revenue have fared less badly, possibly reflecting their relative insensitivity to potentially adverse currency movements if Britain votes to leave the European Union.

Those with minimal reliance on overseas trade - notably DotDigital Group, The Mission Marketing Group and Ten Alps (now trading as Zinc Media) - have suffered no decline in price since the weekend.

Yesterday Marketing Services Financial Intelligence drew attention to the potentially harmful impact of adverse currency movements on marketing companies with substantial overseas interests.  Its annual review of balance sheet vulnerability observed that there must be a probability that sterling will lose value in world currency markets, in the short term at least, if the UK decides to leave.

"That would make overseas acquisitions more expensive and depress the value of revenues earned overseas", the report said. "Both consequences would increase publicly listed marketing companies' capital requirements, whether obtained from shareholders or in bank borrowings."

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Marketing Services Financial Intelligence can be viewed at www. fintellect.com


Further information from:

Robert Willott (editor), Marketing Services Financial Intelligence.

Tel: +44 (0)1386 700361.  Email: rgwillott@fintellect.com