WPP Group defies forecasts with bullish growth

WPP Group, the worlds 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.

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.

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