UK advertising giant, WPP, today announced that revenues for quarter one 2004 have increased by nearly 6% to £960 million, citing the third consecutive quarter increase for the Group, which includes a 12% rise to UK revenue.
The trading update shows that all regions had double-digit revenue growth except for Continental Europe. Asia-Pacific, Latin America, Africa and the Middle East experienced the largest growth, up over 28%. North America grew by 11% and Continental Europe by 7%.
Martin Sorrell, WPP chief executive said at this morning’s sell-side analyst meeting: “The company is very much on track; 3-4% growth is expected for 2004.”
He added: “The UK is over the worst, there’s certain countries in Continental Europe, such as Germany, still suffering. The UK is still potentially an issue even though, yes, there’s been some growth.”
All business sectors grew; revenue for advertising and media investment management was up over 14% for this quarter, while the public relations and public affairs sector, which was hit hardest by the recession was up by 6%. Sorrell said: “Media owners, especially newspaper owners, are saying that advertising revenue is still way off the peaks of 2000. With media businesses being fragmented, pure advertising businesses will find issues because of cost-per-thousand, non-advertising businesses like public relations, design and direct marketing will find it easier.”
WPP’s new business billings won during the first quarter totaled £514 million ($926 million) and there are an increasing number of new business opportunities available, as clients turn their attention to managing for growth and the top line, rather than focusing totally on costs.
The statement says that during the first quarter, both profitability and operating margin were above budget due to strong revenue conversion. Full-year margin forecasts are in line with the Group’s margin target for 2004 of a 13.8% increase.
During the first quarter of 2004, WPP completed acquisitions or increased equity interests in advertising and media investment management in Germany, Sweden, Indonesia and South Korea and in public relations & affairs in the United States and the United Kingdom.
Looking forward Sorrell said: “The only possible cloud is what happens at this year’s Presidential elections and what the new President inherits, for example, weak dollar, budget deficit etc.”
The Group continues to focus on its key objectives of improving operating profits and margins, as well as developing its portfolio in high revenue growth geographically and functionally says the statement.
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