WPP has revealed a rise in revenues in an optimistic quarterly trading update issued today, outlining a good performance helped in part by the first-time contribution by the recently-acquired Grey Global.
The company’s first quarter revenues have risen by over 16% year on year, primarily reflecting strong organic growth. On a like-for-like basis, excluding acquisitions and currency fluctuations, revenues were up almost 6%. The growth maintains WPP’s strong performance in the last two quarters of 2004, reflecting a growing focus on improving profitability at the firm.
All of WPP’s regional operations showed double digit revenue growth in the first quarter. In North America, revenues were up over 16%. In Europe, the UK was up 12% and Continental Europe up over 15%. Asia Pacific, Latin America, Africa and the Middle East were up 22%.
The company reported net new business billings of £875 million ($1.62 billion) during the first quarter, stating that the continued consolidation trends in the industry were benefiting its trade, winning several large assignments from existing and new clients.
Both the company’s profitability and operating margin were ahead of budget for the quarter, with full year margin forecasts in line with the Group’s revised combined margin target for 2005, including Grey, of 14.3%.
Setting its aims for the coming months, the trading update stated: “The Group continues to focus on its key objectives of improving operating profits by 10% to 15% per annum; improving operating margins by half to one margin point per annum; improving staff cost to revenue ratios by 0.6 margin points per annum; growing revenue faster than industry averages; improving our creative reputation and stimulating co-operation among Group companies.”
Related Links
