WPP Sees Revenue Boost

NEW YORK WPP Group’s worldwide revenue, on a reportable basis, rose almost 6 percent in the first five months of 2004, shareholders were told by chief executive Martin Sorrell at Monday’s annual meeting in London. Constant currency revenue increased almost 13 percent.

Besides the year’s quadrennial boost from events like the Olympics, American elections and the European football championships, Sorrell cited continued growth from the U.S., now in its second year of improvement after a severe industry recession.

On a like-for-like basis, excluding acquisitions and currency fluctuations, revenue rose almost 2 percent. Excluding WPP’s 2003 acquisition of Cordiant, like-for-like revenue was up almost 4 percent.

Operating margins in the first five months were ahead of budget, Sorrell noted, which targets a full-year improvement of a 0.8 margin point, in line with WPP’s target of 13.8. Average headcount dropped more than 2 percent in the first five months, with revenue per head up over 4 percent.

WPP will report its half-year financials in August.

Sorrell said the Asia Pacific region remains strong across the board, with ongoing recovery in Japan and also in China, “despite fears of over-heating.” Latin America, led by Argentina, shows “significant” recovery from the depressed levels of last year, he said. However, Western Europe remains “especially tough” particularly in France, Germany and the U.K. Scandinavia, Benelux, Portugal, Greece and Turkey also remain “difficult,” he said, although Eastern Europe, including Russia, is doing better.

By sector, advertising and media investment grew over 14 percent; consultancy, over 5 percent; public relations almost 7 percent; and branding and identity, healthcare and specialist communications almost 19 percent.

“Media investment management continues to be the most buoyant part of our business, along with direct, interactive, Internet and healthcare activities,” Sorrell said. “Public relations and public affairs show significant improvement over last year, continuing the turnaround first seen at the end of last year.”