WPP on up and up as it posts record profits

By Marketing Week 23 Feb 1996 12:00 am

WPP has announced pre-tax profits of 113.7m, up 33 per cent from 85.3m last year.

Preliminary results for the year ending December 31, 1995 comfortably exceeded City expectations, which were nearer 109m.

WPP chief executive Martin Sorrell is well on the way to collecting his 28m pay package over the next five years, which was agreed last June (MW, June 23) after a battle with dissident investors and an extraordinary shareholders’ meeting. The sticking point was that Sorrell’s pay would have to be related to the performance of shares, which rose from 173p to 180p on Tuesday, rather than the company’s performance.

In its tenth year of operation, WPP’s situation has never been so good. Turnover is up nine per cent to 6.55bn and earnings per share rose 40 per cent to 9.1p from 6.5p.

Operating margins are up 1.1 per cent to nine per cent and there are expectations that this will rise to ten per cent during 1996.

WPP predicts a four per cent increase in revenue this year and believes it could generate another 20m to 30m in operating profit in its advertising and public relations businesses.

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