PR remains WPP's Achilles heel with 3.6% revenue drop
WPP has reported another set of results characterised by declining PR revenues at odds with group growth.
WPP chief executive: Sir Martin Sorrell
The UK-listed group, which owns agencies such as RLM Finsbury and Burson-Marsteller, reported overall like-for-like revenue growth of 2.4 per cent to £5.3bn for the first six months of the year.
However, its public relations and public affairs sector reported a like-for-like revenue drop of 3.6 per cent to £458m, and a 0.2 per cent drop on a reported basis.
The drop was attributed to WPP chief executive Sir Martin Sorrell to 'reviews of discretionary spending in mature markets'.
According to the financial results statement, there was some improvement in the United States, Western Continental Europe, Africa & the Middle East and Asia Pacific, but the United Kingdom was slower.
Its other three sectors all reported like-for-like growth, led by advertising and media investment management, with a 4.3 per cent increase to £2.2bn.
PR and public affairs operating profit dropped from £62m in the first half of 2012 to £60m, with the operating margin down from 13.5 per cent to 13 per cent.
The results follow a fall in annual headline PR profits last year from £142.9m in 2011 to £136.4m and a one per cent drop in like-for-like revenues.
The group houses agencies including Cohn & Wolfe, H+K Strategies, Ogilvy Public Relations and Penn Schoen & Berland.
WPP commented that H+K Strategies, Cohn & Wolfe, Penn Schoen & Berland and RLM Finsbury showed improving margins in the first half.
This article was first published on prweek.com
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