WPP Puts Faith In The Future

WPP is expected to announce a fall in profits for the first half of 2003, when it issues interim results this week, but there is growing confidence that the advertising industry is emerging from recession.

According to a report in The Observer, WPP’s chief executive Martin Sorrell does not foresee any recovery until late-2004 but there are at least signs that the market has bottomed out.

Merrill Lynch predicts that first half profits at the global advertising group will be in the region of £186 million, down from £210 million last year. Revenues are set to remain flat at £1.9 billion.

Trading is expected to pick up in second half and Merrill is forecasting full-year profits of £429 million, compared with £394 million in 2002.

Looking beyond the short term, earnings at WPP will be boosted by the purchase of Cordiant Communications. After a protracted bidding process, Sorrell’s company recently completed a £266 million acquisition deal.

Shares in WPP were down 2.25p at 567.75p at noon today.

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