Global advertising company, WPP has announced a 15% increase in profits for 2004 to £546 million, reflecting the continued recovery of the advertising market.
The second largest advertising company in the world, reported that revenue was up almost 5% to £4.3 million for last year, and that diluted earnings per share rose by over 11% to 32.3p.
Constant currency revenue was up by over 11% for 2004, with like-for-like revenue also enjoying the upwards trend, up 4%.
Sir Martin Sorrell’s Group reported that billings were up over 5% to 19.6 billion, operating margin gained 1.1 points to 14.1% and final dividends were up an impressive 20%.
The Group attributes its strong performance in 2004 to the strengthening of the advertising industry, the Olympic games and winning work for clients including Microsoft Corp and HSBC Bank Plc.
Future prospects for WPP look strong, with the improved levels of operating profit and margin, incentive pools and variable staff costs being rebuilt after the recession, signalling improving operational gearing and flexibility in 2005 and beyond.
At the end of January, WPP won European approval for its $1.5 billion purchase of New York based Grey Global Group, despite industry worries how the merger may affect the market for media buying (see WPP Approved To Buy Grey).
Grey will lift WPP’s revenues by around 20%, WPP said last September, and combined revenue for 2004 would have reached £4.9 billion ($9.2 billion).
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