WPP pre-tax profits rise 19% to £427m

WPP, the holding group of Ogilvy & Mather and MediaCom, reported pre-tax profits of £427.1 million in the first half of 2013, up 19.4 per cent year on year, led by advertising and media investment management.

Sir Martin Sorrell: chief executive of WPP
Sir Martin Sorrell: chief executive of WPP

According to WPP’s interim results for the six months ended 30 June 2013, the owner of JWT and MEC generated group revenue of £5.33 billion, up 7.1 per cent year on year and an increase of 5.5 per cent in constant currency.

WPP’s like-for-like revenue growth was 2.4 per cent year on year in the first half of 2013, while revenue grew 3.1 per cent on the basis of acquisitions and 1.6 per cent from changes in the value of different currency.

Like-for-like revenues increased by 2.7 per cent year on year in the second quarter of 2013, up from 2.1 per cent in the first three months.

WPP said client data continued to reflect increased advertising and promotional spending, with advertising growing the quicker of the two. In quarter two, there was a continuation of the strength of ad spending among FMCGs in particular.

There was constant currency growth in all regions and business segments, apart from public relations and public affairs.

WPP said it experienced "improvement" in the UK and US in the second quarter of 2013, but this was partially offset by slower rates of growth in faster-growing markets and the mature markets of Western Continental Europe.

Revenue in the UK across the first half of 2013 was £669 million, up 13.1 per cent year on year and a like-for-like increase of 4.6 per cent. Between 1 April and 30 June, UK revenue was £350 million, up 14.1 per cent or 5.4 per cent on a like-for-like basis.

WPP said that in the UK, its advertising and media investment management, branding and identity, healthcare and direct, digital and interactive businesses "showed particularly strong growth".

Globally, advertising and media investment management was the "strongest performing sector", with like-for-like growth of 4.7 per cent year on year in the second quarter of 2013, up from 3.9 per cent in the first quarter.

Growth in the advertising business was slower in the second quarter than the first, although Y&R and Grey continued their "strong performance", especially in North America.

Meanwhile, media investment management was "considerably stronger" than advertising and posted double-digit growth in Q2. The media investment management division reported like-for-like growth of more than eight per cent in the first half.

Group operating profit at WPP was £513.8 million in the first half of 2013, up 12.8 per cent year on year or 10.0 per cent when the effect of changes in currency exchange rates is stripped out.

Overall billings at WPP reached £22.74 billion in the six months to 30 June 2013, up 5.0 per cent year on year or 3.3 per cent in constant currency.

WPP said revenues were stronger in July than they had been in the first six months, up 5.0 per cent on a like-for-like basis, the highest monthly growth rate in 2013. WPP expects growth in the second half and third quarter to be stronger than the first half.

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