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WPP Group Plc: Annual General Meeting Results

The advertising group, WPP, said that worldwide revenues were up by over 10%. Growth in Europe increased by almost 6% with the combined revenues of J.Walter Thompson, Ogilvy & Mather Worldwide and Conquest Europe rising over 9%.
Compared to the previous year, specialist communications activities were concentrated in the UK as well as the US and performed particularly well. Strong contributions came from the offices of Promotional Campaigns in the UK and RTCdirect amongst others.
The company is taking a cautious approach in the evaluation of future trends as some believe that with UK and US general elections the rate of economic growth and inflation will increase by the end of 1996. By 1998 there may be a post-election recession. Given the importance of these two factors the Board believe in the importance of generating revenue growth of existing clients and also place greater emphasis on balancing the links with staff costs and revenue, and revenue conversion.
Briefly, trading margins have increased above the business plan which looks for operating margins of 1% in 1996, 1997 and 1998. Staff levels rose by over 3% to 20,637 in the first five months in 1996 compared to 19,977 in 1995. So far in 1996 net debt levels fell by 24% to £172 million compared to £266 million last year and £437 million in 1992. Equity market value has risen from £98 million to 1.5 billion in the last four years.
The current surplus cashflow is approximately $80-100 million and the company is focused on increasing operating profit by 15-20%; increasing operating margins by 1-2% per annum; reducing staff cost to revenue ratios; and lastly converting 1/3 of incremental revenue to profit while growing revenues above or equal to market rates.
Source: WPP Group plc AGM Report
Contact: Fiona McEwan, Martin Sorrell,
Tel 0171 408 2204
Fax 0171 493 6819