WPP hits revenues of £1bn a quarter as UK jumps 12%
LONDON - WPP Group, owner of agencies including J Walter Thompson and MindShare, has seen revenue rise 4% over the past quarter to £1.07bn, beating analysts' forecasts and pushing revenue past the £1bn mark for a quarter for the first time.
In a trading statement, WPP said that UK revenues had risen by more than 12% over the quarter, ahead of North America, which saw a 10% rise. Continental Europe saw a 7% increase.
However, even the UK lagged behind Asia Pacific, Latin America, Africa and the Middle East, which saw revenues up by 22%.
WPP said that the full-year operating margin was well in line with targets, and that it had already booked $1.5bn (£815m) in new business for the first month of the fourth quarter.
The star performer has been its media business, Group M, which has won the $125m Toys 'R' Us media account, the $480m Paramount Pictures account and a share of Nestle's £900m consolidated global media.
As anticipated, WPP chief executive Sir Martin Sorrell is wary of the industry's ability to maintain growth rates next year.
"The jury remains out on 2005. There are still concerns about the prospects for the US economy after the Presidential election, with its fiscal deficit, weak dollar and rising commodity prices, including oil, although the weakness in some of the major markets in Western Europe is ameliorating," he said.
The company said that it expects next year's industry growth rates to be around 2% to 3%, compared with 3% to 4% this year, although the US slowdown could be tempered by continued growth in Asia Pacific, if the Chinese economy manages a soft landing, as well as continued recovery in Western Europe and Latin America.
Sector-wise, advertising and media revenues were up 9% and PR and public affairs rose by 8%. But the star performer was what WPP dubs insight and consultancy, including market research, which saw revenues leap by 18%.
The market reacted to the news with enthusiasm this morning, as WPP shares rose by almost 4% to trade at 538p, a rise of 14.5p.
WPP said it expected its merger with Grey Global Group, which was agreed in September, to be completed in early 2005.
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