WPP has unveiled a 20 per cent increase in half-year profits as
strong growth in North America and Europe more than offset turmoil in
the Far East and the effects of a strong pound.
Profit before tax for the group soared to pounds 93.8 million in the six
months to 30 June 1998, a figure which looks even better if viewed on a
constant currency basis, translating into a 30 per cent rise.
Revenues at WPP were also healthy, climbing more than 8 per cent, or 13
per cent in constant currencies, to pounds 900 million for the group as
a whole. The UK, which provides a fifth of revenues, was the
strongest-performing area, closely followed by Continental Europe. Both
surged by around 19 per cent on a constant currency basis.
Operating margins rose by 1 per cent to 12.1 per cent, and the group
said it was on target to reach 12.8 per cent by the end of the 1998
No separate figures were revealed for WPP’s three main agency brands:
Ogilvy & Mather, J. Walter Thompson and Conquest. However, WPP’s chief
executive, Martin Sorrell, said that constant currency revenues for
these operations rose by 11 per cent during the period.
He added that the four organisations generated net new business billings
during the period of pounds 349 million, up 25 per cent on last year.
Figures later revealed to analysts showed that O&M’s dollars 100 million
loss of billings as a result of the Ford realignment into Young &
Rubicam in Europe would be more than offset by wins in New York for
Kraft and Starwood hotels and in Europe for SmithKline Beecham.