BARCELONA (Reuters) - A series of cabinet resignations in Britain over a draft deal to take Britain out of the European Union reinforces uncertainties over the future of the country’s ad market, the co-chief executive of outdoor advertising company JCDecaux (JCDX.PA) said on Thursday.
JCDecaux, the world’s leading outdoor advertising company, manages the bus shelter advertising concession by Transport for London (TfL). Britain is its third biggest market and represents 10 percent of its total revenues.
“The situation is obviously very serious,” Jean-Charles Decaux told Reuters in an interview on the sidelines of the Morgan Stanley TMT conference in Barcelona.
“Today’s events reinforce the uncertainties in this market,” the French company’s executive added.
The family-controlled group is also the number one outdoor advertising company in Britain, where Jean-Charles’s brother, the company’s other co-CEO, Jean-Francois, has lived for three decades.
“Even if we regret this whole situation, we will keep on investing in the British market, whatever the outcome of these discussions,” Decaux said.
On Thursday, just over 12 hours after British Prime Minister Theresa May announced that her team of top ministers had agreed to the terms of the draft agreement, Brexit minister Dominic Raab and work and pensions minister Esther McVey quit, saying they could not support it.
Jean-Charles Decaux said the company had anticipated the difficulties surrounding the Brexit talks and deployed 20 percent fewer digital screens than initially planned in the contract with TFL.
The fall in value of the pound has affected revenues coming from Britain, but that effect is offset by the group’s growth and presence worldwide.
The group, which also sells ads through street furniture and billboards, has grown internationally since its initial public offering in 2001 and is now present in 80 countries, including China, its number one market before France.
JCDecaux’s sales rose by 7.3 percent on an organic basis in the third quarter and are expected to increase by 4.5 percent in 2018 as a whole.
Jean-Charles Decaux said the company’s growth would outperform the overall ad market, which he expects to increase by 4 percent this year.
Reporting by Mathieu Rosemain; editing by Michel Rose and Jane Merriman