WPP Trading Update

WPP’s third quarter trading update released this week shows that in constant currencies revenues rose by 15%, and gross profit by over 16%, with acquisitions accounting for nearly 6% of this growth. In the first nine months, revenues rose by nearly 14% and gross profit by over 15%, again with acquisitions accounting for nearly 6% of this growth.

The Group reported an 11% revenue increase in its Q3 revenue, rising to £471.0 million, with the strength of sterling continuing to have an impact. Growth in the US, UK and Continenetal Europe compensated for difficulties in parts of Asia Pacific and Latin America.

Some of the newer parts of the WPP empire are responsible for the fast growth, with public relations and public affairs up by 20%. Information and consultancy was up by over 31%. WPP pointed out that advertisers are now inclined to spend less on products that depend on promotion. Low inflation makes price a less effective means of differentiating brands.

Where current trading is concerned, the group is in line with budget and ahead of last year.

For the future, WPP plans to focus on its key objectives of improving operating margins and profits, increasing cost flexibility, improving the group’s portfolio and improving the creative quality of all of its businesses. It recently launched a new research tool called BRANDZ (see Newsline).

WPP: 0171 408 2204