WPP Enjoys Healthy Third Quarter
Revenues at WPP, the world’s third largest communications group, exceeded £1 billion in the third quarter as the global advertising recovery gathered momentum.
On a like-for-like basis, excluding the impact of acquisitions and currency fluctuations, group revenues rose by more than 1% and over 2% excluding the impact of the acquisition of Cordiant.
“Third quarter revised forecasts indicate the the group’s operating margin for the second half of the year is likely to be stronger than that for the first half, and in line with the revised margin target of a minimum of 13.0% following the acquisition of Cordiant,” the company said.
The regional breakdown shows that revenues grew by more than 8% in North America in the three months to September 30. The UK recorded more muted growth of 6% but Continental Europe was up by 11%. Asia Pacific, Latin America, Africa and the Middle East reported the strongest revenue growth of 17%.
WPP said that advertising and media investment management was the strongest sector with revenues up almost 14% to £483 million. Public relations remained flat but branding and identity, healthcare and specialist communications saw growth of more than 9%. Revenues from information, insight and consultancy increased by 7%.
Outlook Further evidence of improving market conditions comes from the fact that net new business billings of £402 million were won during the third quarter. WPP claims to be winning several large assignments and sits at the top of the Lehman Brothers New Business Scorecard (see Top Agencies To Enjoy The Fruits Of Recovery)
The company remains committed to improving operating profits by 10 to 15% (see WPP Undeterred By Profit Fall) and believes that 2004 will herald a period of strong growth with the US presidential election and the Athens Olympics likely to stimulate advertising.
Shares in WPP were up 18.5p at 562p at 11am today.
