WPP post 36% increase in profits |
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Sun, 26 Feb 2006 02:05
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LONDON: Advertising and media services company WPP Group said Friday its full-year pretax profit had gone up 36 per cent to 669 million pounds. Revenues grew 25 per cent to 5.4 billion pounds.
Analysts had been expecting profits of 627.1 million pounds and revenues of 5.29 billion pounds.
The company, with its ad agencies Young & Rubicam and JWT, said U.S. ad company Grey Global, which it acquired last year, contributed to its increased revenues. It hopes to have revenues climbing up 4 per cent to 5 per cent in 2006, ahead of the expected industry average of 4 per cent. Its January like-for-like revenues were up 5.5 per cent.
WPP said it intends to pursue its acquisition and share buyback plans now that it has cash flow of 600 million pounds.
Sir Martin Sorrell, WPP's chief executive, said the company would target smaller buyouts in fast-developing markets. He said plans to acquire Dutch market research firm VNU and British media buyer Aegis stand dropped.
Sorrell also said the company is now looking at internet, direct and interactive, and in the faster-growing markets. These activities now account for more than 15 per cent of the group's revenues.
WPP is involved in a case in Italy, where it had terminated the services of its country manager Marco Benatti over fraud charges, and is investigating the Italian unit's operations. Benatti has denied the charges of wrongdoing and said his departure was due to a disagreement with another WPP manager in Italy.
WPP has clients like HSBC and Ford Motor, but it lost Coca-Cola and Samsung in 2005. Sorrell is upbeat about 2006 as the Winter Olympics and World Cup are expected to see increased advertising spending.
WPP is paying 6.34 pence as dividend, up 20 per cent.
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WPP Q3 revenues register a 5% rise 