WPP posts profits of £747m and £2.9bn in new billings

by Arif Durrani, mediaweek.co.uk 06-Mar-09, 11:05

LONDON - WPP, the global marketing services group behind MediaCom, Mindshare and Mediaedge:cia, has reported a 2.7% rise in like-for-like revenue and a 3.8% lift in profit before tax in a year categorised by "two contrasting halves".

In today's preliminary results for 2008, the Martin Sorrell-led group posted profits of £747m and estimated net new billings of almost £2.9bn.

However, the group, which also owns advertising giants Ogilvy & Mather and Young & Rubicam and the newly acquired TNS, did fall short of its operating margin target of 15.3%, achieving 15%, after a weak fourth quarter.

Its advertising and media investment management operations rose by 4.4%. The like-for-like revenue increase was 3.6% and the combined operating margin of this sector rose by more than one point.

In a year that began with strong organic growth of 4% which slowed to 1% in the second half, public relations and public affairs was the fastest growing sector on a like-for-like basis.

Geographically, the group's best performing division was its east Asia, Africa, Middle East and Latin American business, where like-for-like revenues increased by 8%, and now make-up a quarter of group sales.

There was more modest 2% growth for Europe and the UK, although central and eastern Europe were said to be "more buoyant".

Looking ahead, WPP has downgraded its forecast for 2009 from flat like-for-like revenue growth to falls of 2%, blaming "a vicious recession across the globe" triggered by an "unprecedented financial crisis".

The first half of 2009 is expected to be the weaker, with a slight pick-up in the second half, partly due to weaker year-on-year comparisons.