Dentsu reports record £1.6bn profits

Dentsu delivered record profits of more than £1.6 billion in the last financial year on the back of an improving Japanese economy.

The advertising conglomerate, one of the world's largest, saw its gross profits jump by 8.1 per cent to £1.6 billion in the year ending 31 March, according to figures released this week.

The company, which derives 95 per cent of its revenue from Japan, cited a rebounding domestic economy for the significant improvement in its fortunes. Despite what it called some "lingering sluggishness" in the Japanese economy, Dentsu said it was reaping the benefits of improvements in corporate profits and rising employment levels.

Higher adspends had benefited from this, as well as other pump primers such as the 2004 Athens Olympics and increased consumption resulting from Japan's summer heatwave.

Dentsu, which controls between 40 per cent and 50 per cent of commercial airtime on Japanese TV and services more than 6,000 clients, said ad budgets in all major media had exceeded those of the previous year.

Internet spend had also increased substantially because of the proliferation of broadband.

The company calculates that adspend in Japan during 2004 grew by 3 per cent to £29.7 billion, the first increase in four years.

Despite operating in 27 countries, Dentsu has always operated cautiously beyond its domestic borders. It has extended its representation in Asia through a partnership with the WPP-owned Young & Rubicam network and also holds a 15 per cent stake in Publicis Groupe.