Sorrell optimistic on organic growth as WPP's forecast upped

by Staff, Brand Republic 27-Sep-05, 15:30

LONDON - WPP Group chief executive Sir Martin Sorrell has raised forecasts on organic growth to between 5% and 6%, putting the advertising giant ahead of analyst expectations.

Speaking at a Bernstein analyst conference, Sorrell said that organic revenue growth was up 6% in August year-on-year. The figure is double that of June and July's organic growth, which was 3%.

"Most importantly, Sorrell effectively raised the company's 2005 organic revenue guidance to 5%-6% from 4%-5% previously. Our current estimate is 4.9%," Bernsteins said in a note to clients.

Last month, WPP reported a 32% rise in pre-tax profits to £254.8m and said that its media agencies, MindShare, Mediaedge:cia and MediaCom, have shown the strongest growth of all its sectors.

Recent account wins have seen Mediaedge:cia appointed to share Michelin's £20m European account, and Mediaedge:cia and MediaCom winning the €200m global media task from Ikea.

In the first half of the year, WPP saw new billings of £1.9bn and said it estimates that more than 35% of these wins were generated through the joint development of opportunities by two or more companies within the group.

WPP shares were up 2.5%, or 14p, this afternoon to 575p.

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