Major ad groups post encouraging figures

Signs that the embattled global advertising industry may be stabilising were reflected in first-quarter figures from Omnicom and WPP.

Omnicom saw its worldwide revenues rise by 12 per cent to £1.22 billion. Meanwhile, WPP confirmed it was on target to increase overall margins from 12.3 per cent last year to 13.3 per cent by the end of this year.

Nevertheless, the going remains tough for both groups. WPP's revenue for the period fell by 3.9 per cent to £909 million, while Omnicom saw a flat earnings performance.

However, the chief executives of both groups said they saw signs of the gloom lifting.

Omnicom's John Wren said worries about the impact of the war in Iraq had been largely unfounded. "It was less significant than we had feared," he claimed.

His WPP counterpart, Sir Martin Sorrell, acknowledged some encouraging signs but warned about the possible effect of the Sars epidemic. He said he was sticking to his forecast that any substantial improvement would not happen until next year.

Analysts applauded Omnicom's performance, pointing out that the company had managed to generate 2.6 per cent of organic growth despite the uncertain environment.

Numis Securities said the $340 million Burger King win by WPP's Young & Rubicam agency in New York was an excellent start to the year. "WPP will be a clear beneficiary of advertising recovery and we retain our positive stance," the stockbroker said.

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