WPP Says Conditions Remain Tough In UK
WPP chairman, Philip Lader, said today that the US advertising market continues to show growth but that conditions in Western Europe remain relatively tough, particularly in France, Germany and the United Kingdom.
Commenting on operating for the first five months of this year, Lader (pictured) said: “2004 is certainly proving to be a better year than 2003, with the so-called quadrennial factors improving growth prospects.
He added: “The European Football Championships, the Athens Olympics, American political advertising and the US presidential elections all add up to a better climate for advertising and marketing services expenditure.”
As well as the US, Asia Pacific remains strong across the board, with recovery in Japan and China, despite previous fears of over-heating. Latin America, driven by Argentina, is also showing signs of significant recovery said the statement.
In contrast however, conditions in Western Europe remain difficult for France, Germany, the UK, Scandinavia, Benelux, Portugal, Greece and Turkey. While things looked more promising for Eastern European countries, including Russia and the CIS, who are performing better than expected.
Worldwide revenues were up nearly 6% for the period January to May 2004, with the UK growing by over 12%, North America up 10%, while Continental Europe grew by 8%. The largest growth over the five month period came from Asia Pacific, Latin America, Africa and the Middle East, who were up over 30%.
Health care and specialists communications experienced the largest growth over the period, up by nearly 19%, followed by advertising and media investment management which was up over 14%. The sector most affected by the recession, public relations and public affairs, finally started to pick up and grew by 7%.
Lader said: “Media investment management continues to be the most buoyant part of the business, along with direct interactive, internet and healthcare activities. While brand advertising continues to grow, along with information, insight & consultancy and branding & identity.”
The Group’s operating companies improved productivity during the first five months of 2004, average headcount was down over 2% while revenue per head was up over 4%. Operating margins were ahead of budget, which targeted a full year improvement of 0.8 of a margin point, in line with the Group’s target of 13.8.
The financial strategy of the Group continues to be a focus, with three main objectives in mind; increasing operating profit by 10%-15% per annum, increasing operating margins by up to 1.0 margin points or more per annum and reducing staff cost to revenue ratios by up to 0.6 margin points per annum.
WPP: 020 7408 2204 www.wpp.com
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