WPP reveals record 2005 profits rise

by John Tylee, Campaign 03-Mar-06

Sir Martin Sorrell's WPP has countered the negative PR generated by its high-profile Italian legal wrangle by announcing a record 36 per cent profits rise last year. WPP's share price this week rose 5.5p to 668p in the wake of the news.

The group, whose networks include JWT, Ogilvy & Mather, Young & Rubicam
and Grey, saw its pre-tax profits leap to £669 million in
2005.

The rise comes on the back of what it said was the continued growth of

the world economy last year.

And it expects its business to grow by 4 to 5 per cent this year as a
result of the Winter Olympics, the World Cup and the US mid-term
elections.

Sorrell expects the three events together will boost global adspend by 1
per cent.

Analysts predict the group is well placed to sustain its momentum as it
increases its exposure to faster-growing markets and disciplines through
organic growth and acquisitions. Sorrell said: "We're looking at
internet, direct and interactive, and in the faster-growing
markets."

In the medium term, WPP aims to be generating a third of its revenue
from Asia, Latin America, Africa and the Middle East. It also wants to
derive about two-thirds of its income from the most dynamic marketing
communications sectors instead of the current 52 per cent.

Reported revenue rose 25 per cent to £5.4 billion, largely a
reflection of the £376 million Grey acquisition.