Sir Martin Sorrell foresees no WPP recovery until 2004

Sir Martin Sorrell's WPP group has reported sliding profit margins this week and has warned that recovery will have to wait until 2004.

In its results for the first half of 2002, the advertising and marketing giant's financial performance mirrored the global economic conditions, with revenue down almost 2 per cent to £1.96 billion.

And the group's 8 per cent like-for-like revenue decline in the first half of 2002 exceeded the budgeted decline of almost 5 per cent.

The group - which owns Young & Rubicam, Ogilvy & Mather and J. Walter Thompson - reported that its pre-tax profits for the six months to the end of June fell by almost 17 per cent to £210.4 million.

In a statement, WPP said: "It has become apparent that any significant improvement could be delayed still further and that even improvements in comparative performance could be relatively mild. It cited the US presidential election and the Athens Olympics as hopeful instigators of a positive recovery in 2004.

WPP has also abandoned its operating margin target of 15 per cent, saying market conditions would make last year's operating margins of 14 per cent difficult to achieve in 2002.

On a constant currency basis, the combined revenue at O&M, JWT, Y&R, Red Cell, MindShare and mediaedge: cia fell by more than 2 per cent, with operating margins down.

However, WPP announced it had netted £1.2 billion in new-business billings in the first half of the year.

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