WPP Group defies forecasts with bullish growth

WPP Group, the world’s second biggest marketing services company, has unveiled strong full-year results for 2007, slightly ahead of analyst expectations. The group, headed by Sir Martin Sorrell, remains bullish, despite fears of economic slowdown.

The group recorded a 5% year-on-year increase in revenue to £6.18bn, and an adjusted pre-tax profit increase of around 7% to £817m. The company, which owns the ad agency Grey and consolidated media buying point Group M, says it has seen “little or no impact” from the sub-prime mortgage and global credit crunch crisis.

It says in a statement: “2008 should be a better year than 2007, against the views of most economic forecasters, who predict a gloomy 2008.” However, it expects 2009 to be tougher when “a slowdown, not a recession, in the US will be hard to avoid”. It also expects China’s economy to “pause a little” after the Beijing Olympics.

In 2007, WPP boosted its “broadly-defined internet-related revenue” to $2.8bn (£1.4bn) or 23% of worldwide reported revenue.

However, “narrowly-defined internet-related revenue” was $1.5bn (£750m) or 12% of worldwide reported revenue, ahead of a global average 10% share.

The holding company also grew the share of revenue it took from marketing services – disciplines beyond traditional advertising – to 53.8% of total revenues from 52.5% in 2006.

The UK accounted for 14.4% of total group revenue, a 4% rise on the year before, and an operating profit of 11.6% of the total, up 2.1% on 2006.

WPP says it will maintain operating targets of 15.5% this year and 16% for 2009, despite an expected slowdown.