Havas and WPP report solid half-year figures

Havas and WPP, the communication giants involved in a tug-of-war

for Tempus, which owns the media agency CIA, have both ridden the

recession with better than expected half-year figures.



But Sir Martin Sorrell, WPP's chief executive, and Alain de Pouzilhac,

his Havas counterpart, both warn of tough advertising markets with

growth unlikely to pick up again until next year.



At the same time, WPP said it was concerned that what had until now been

essentially a business-to-business recession will spill over into the

consumer sector.



"I think that the odds are it will get tougher before it gets easier,"

Sorrell said.



Nevertheless, WPP and Havas, the world's second- and fifth-largest

communication groups respectively, both turned in solid

performances.



The Paris-based Havas posted a revenue of almost £700 million for

the first half of the year - an increase of 49.8 per cent on the first

half of 2000 - together with billings of £4.6 billion.



De Pouzilhac cited the group's significant new-business wins, its

acquisition policy and strong growth in the burgeoning media and

marketing services sector as the reasons for the figures.



"In a market situation that declined over the second quarter of 2001,

Havas recorded overall growth of nearly 50 per cent and organic growth

of 5.5 per cent higher than the organic growth average for the three

largest communications groups in the world," de Pouzilhac said.



Meanwhile, WPP this week posted pre-tax profits of £247.6 million

for the six months to the end of June, up by almost 80 per cent but

including the first contribution from last year's acquisition, Young &

Rubicam.



Revenue jumped by more than 65 per cent to pounds l.997 billion.



WPP claims it is well positioned to weather the economic storm because

of its strong financial position, geographic spread and consistent

new-business record.



It also believes that its strength in information and consultancy

services, PR and public affairs, identity and branding, healthcare and

specialist communications will help insulate it. All these will grow in

importance as clients spend increasing proportions of their budgets on

below-the-line activities, WPP says.



Havas too said it was committed to its strategy, successfully developed

over the past four years, of developing specialised divisions.



Similiarly, WPP admitted difficult market conditions were forcing it to

plan conservatively and focus attention on hitting margin targets.



It said its efforts had been reflected in the performances of its

subsidiaries - Ogilvy & Mather (including Cole & Weber and OgilvyOne),

J. Walter Thompson, Y&R (including The Media Edge), Red Cell and

MindShare, whose combined operating margins rose to 16.6 per cent in the

first half of the year compared with 15.9 per cent during the same

period in 2000.



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