So much for the accuracy of ‘leaks’ to the press! Yesterday’s prediction of a 15% shortfall in first half profits at WPP Group [WAMN: 19-Aug-02], proved optimistic by a factor of two.
The group, the globe’s largest agency holding company by billings, reported Tuesday a 30% slump in interim profits to £173.7 million ($264.62m; €270.85m), down year-on-year from £247.8m.
Like-for-like revenues slid overall by 8%, in accordance with market expectations, and North America – which generates almost 45% of group revenues – fell by over 6%. Britain and mainland Europe were surprisingly immune to the general ad malaise with revenues up 3.9% and 7.7% respectively.
Worst affected were WPP’s PR businesses, where across-the-board revenues slumped 11.2%, while sales at its core advertising assets remained static. Cashflow, however, remains strong and WPP is eyeing further acquisitions and continuing its share buyback programme.
Chief executive Sir Martin Sorrell said the group is well positioned to weather economic uncertainty due to its strong and stable financial position, geographic spread, well-developed brands and diversified business model.
And in a typical Sorrell flourish, WPP defied the 12% fall in headline earnings per share and blew a kiss to investors by upping its interim ordinary dividend to £0.0173 per share.
Data sourced from: Financial Times; additional content by WARC staff