WPP chief executive Sir Martin Sorrell is this week expected to unveil record figures at the group, providing further evidence that the prolonged advertising downturn is finally over.
Analysts are expecting WPP’s half-year results to cheer embattled investors by revealing that underlying pre-tax profits at the world’s second largest advertising group have risen to £230 million, an increase of around 15% on the same period the previous year.
Interim revenues at the company, which owns J Walter Thompson, Ogilvy & Mather and Young & Rubicam, are also expected to top £2 billion for the first time ever, suggesting the long-awaited global advertising recovery is finally gathering pace.
Reports suggest that Sorrell will confirm that the Olympics, which opened in Athens on Friday, the ongoing American presidential election campaign and the recent European Football Championships have all boosted advertising expenditure significantly.
Trading is believed to be buoyant and one analyst told the Observer: “The results will be an opportunity for WPP to be a bit more upbeat. The numbers haven’t really been changing, but now it’s looking better for them. Revenue growth is going to come through.”
Sorrell also looks likely to be quizzed on whether or not WPP will bid for Grey Global, the independent American advertising group that has been put up for sale by its founder and controlling shareholder, Ed Meyer. WPP is currently examine Grey’s books and could make a bid within weeks.
The company, which has a range of high-profile clients including Procter & Gamble, is valued at around £700 million. However, WPP will face tough competition from French advertising group Havas, which has confirmed its intention to make an initial offer of over $1 billion (see Havas Chairman Confirms Interest In Bidding For Grey).
Recent indicators suggest that the UK outlook is improving and the latest Bellwether report from the IPA reveals the steepest rise in marketing spend since the survey began, with improved confidence amongst top advertising executives (see Q2 Bellwether: Market Recovery Continuing For UK Advertisers).
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