WPP reveals record 2005 profits rise

Sir Martin Sorrell's WPP has countered the negative PR generated by its high-profile Italian legal wrangle by announcing a record 36 per cent profits rise last year. WPP's share price this week rose 5.5p to 668p in the wake of the news.

The group, whose networks include JWT, Ogilvy & Mather, Young & Rubicam and Grey, saw its pre-tax profits leap to £669 million in 2005.

The rise comes on the back of what it said was the continued growth of the world economy last year.

And it expects its business to grow by 4 to 5 per cent this year as a result of the Winter Olympics, the World Cup and the US mid-term elections.

Sorrell expects the three events together will boost global adspend by 1 per cent.

Analysts predict the group is well placed to sustain its momentum as it increases its exposure to faster-growing markets and disciplines through organic growth and acquisitions. Sorrell said: "We're looking at internet, direct and interactive, and in the faster-growing markets."

In the medium term, WPP aims to be generating a third of its revenue from Asia, Latin America, Africa and the Middle East. It also wants to derive about two-thirds of its income from the most dynamic marketing communications sectors instead of the current 52 per cent.

Reported revenue rose 25 per cent to £5.4 billion, largely a reflection of the £376 million Grey acquisition.