WPP Acts Bearish Despite Bull Results

20 February 2002

WPP Group’s canny ceo Sir Martin Sorrell long ago learned that under-promising and over-delivering pays handsome dividends.

Hence his bearish prediction today (Wednesday) that worldwide advertising and marketing services expenditure will remain stagnant through the current year. This calculated caution belies WPP’s sparkling full year results for 2001 – a 29% leap in profits crowning the group’s best ever performance achieved in what Sorrell described as a “brutal year”.

Racing ahead of the entrail-rakers’ consensus forecast of 25%, WPP's numbers reveal …

• Revenue up almost 35% to £4.0 billion ($5.72bn; €6.54bn);

• Profit before goodwill, interest, tax, investment gains and write-downs up almost 30% to £561.1 million;

• Operating margins of 14.0%;

• Profit before tax, goodwill, investment gains and write-downs up almost 29% at £489.8 million;

• Diluted earnings per share pre-goodwill, investment gains and write-downs up almost 2% to 30.6p from 30.1p;

• Final dividend up 20% to 3.06p per share making a total for the year of 4.50p up 20% over 2000;

• Net new billings of over £1.6 billion ($2.5 billion);

• Objective to achieve revised fifth margin plan of 15% operating margin by 2002 and 15.5% by 2003.

Investors will be delighted at WPP’s 20% increase in its final dividend to 3.06p per share, making a total of 4.50p per share for 2001, a 20% uplift on 2000.

Data sourced from: WPP Group; additional content by WARC staff