Global advertising company, WPP, has announced record results for 2005, enjoying a 36% year on year increase in full-year profit and a rise in revenue of 25% to £5.4 billion, exceeding previous expectations.
Headline profits before tax were up by over 26% for the year, reaching £669 million, while profit before tax hit £592.0 million, up from £434.4 million.
Operating margin saw an increase of 1.0 margin points to 14%, while reported diluted earnings per share were up by almost 27% to 29.7p from 23.4p.
Average debt for the group was up by £129 million to £1,212 million from £1,083 million, with estimated net new billings of over £2.8 billion.
WPP claims the strong performance seen in 2005 reflects the continued steady growth of the world economy, as well as the good results from Grey Global, which the company acquired last May (see Date Set For WPP Merger With Grey Global).
WPP’s businesses worldwide mirrored economic conditions, with like-for-like revenues in Asia Pacific, Latin America and the rest of the world increasing by 12%, fuelled by growth of 23% in China and about 15% in India.
Growth in North America was steady at 6%, while Continental Europe and the UK remained weaker with growth of 3% and 2%, respectively.
Looking towards 2006, WPP expects worldwide economic conditions to continue to show steady growth, with global advertising and marketing services spend set to rise by at least 4% year on year.
2006 is expected to benefit from the mini-quadrennial impact of the mid-term United States Congressional elections, the FIFA World Cup and the Torino Winter Olympics, while 2007 should also benefit from the build-up to the United States Presidential Elections and the Beijing Olympics in 2008.
WPP: 020 7408 2204 www.wpp.com
