The head of UK advertising agency Cordiant Communications, Michael Bungey, has said he will retire early next year.

Mr Bungey will be succeeded by David Hearn, the New York-based chief executive and chairman of Cordiant's main advertising arm, Bates Worldwide.

The announcement was made as Cordiant reported pre-tax profit and one-off items of �11.5m ($18m) for the first half of the year.

The figure marked a big fall from the profit of �22.1m that Cordiant posted in the same period last year, and the company added that underlying revenues fell by 12%.

Mr Bungey warned that the outlook for the advertising market remained bleak.

'Depressed trading levels persist throughout our markets," he said in a statement.

"Whilst conditions may have stabilised, I see no signs of a recovery anytime soon," he added.

Cordiant also said that it would restructure some of its business, bringing several units together as Bates Group to create "an inherently more efficient and effective service structure for clients".

Ad slump

Mr Bungey's departure had been widely expected.

Cordiant has been badly hit by the global downturn in spending on advertising.

And it has lost a number of large clients including Wendy's International and the South Korean carmaker Hyundai.

Since peaking at 406 pence in March 2000, the company's share price has tumbled and on Thursday it closed at 47.5p.

Last year Cordiant cut 1,600 staff - which accounted for 17% of its workforce - and issued three profit warnings.