WPP Revenues Exceed Expectations And £1bn Barrier
Advertising giant, WPP, exceeded expectations in the third quarter of this year, as revenue rose by nearly 4% to £1.068 billion, marking the first time ever the company has broken through the billion-pound barrier in a three-month period.
Today’s trading update for July to September 2004 shows, revenues in the United Kingdom grew by 12%, outstripping North America and Europe which were up 10% and 7% respectively. However, the clear winners in terms of growth were Asia Pacific, Latin America, Africa and the Middle East, which saw revenues climb 22%.
These results take the group’s overall revenue total in terms of constant currency from January to September to 12.8%, with all regions showing double digit growth, except for Europe, which grew by only 7.9%, compared to North America at 10.9%, United Kingdom at 12.1% and Asia Pacific, Latin America, Africa & the Middle East at 26.4%.
New business winnings during the quarter totalled £234 million, taking the total for the first nine months of this year to £1,771 million. The statement says: “The group continues to benefit from consolidation trends in the industry, winning several large assignments from existing and new clients.”
WPP’s communications, information, insight and consultancy sector was the strongest during the period, growing over 18%, followed by its healthcare and specialist communications department which was up 13%, while advertising & media investment management grew 9% and public relations by 8%.
Looking forward, the group said that new business wins have started extremely strong in the first month of the fourth quarter, with incremental billings of over $1.5 billion already secured and decisions on a further $3 billion of new business awaited.
Commenting on the market next year, the statement said: “The jury remains out on 2005. There are still concerns about the prospects for the United States economy after the presidential elections, 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.
It added: “If industry growth rates this year are 3-4%, next year will probably be at 2-3%, a slight reduction. Any slowdown in the United States may be tempered by continued growth in Asia Pacific, after a Chinese soft-landing and continued recovery in Western Europe and Latin America.”
WPP’s future objective is to continue to focus on its strategic objectives of improving operating profits by 10% to 15% a year by reducing overheads and growing revenue faster than industry averages.
WPP’s merger with Grey Global, which was acquired in September for £845 million, is expected to be completed by early 2005.
WPP: 020 7408 2204 www.wpp.com
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