A pre-tax profit of £365.7 million ($528m) – up 43% on 1999’s £255.5m – was announced this morning by the world’s largest advertising conglomerate, WPP Group.

Although bettering market forecasts for the year ended December, the group warned that a slowdown in 2001 is inevitable. Observing that this year had been greeted with a plethora of downbeat forecasts, WPP cautioned: “Some may prove to be justified.”

But Sir Martin Sorrel’s troops were not downhearted, no sirree: “Early indications are that the worldwide growth of advertising expenditure will be around 5%-6%, with marketing services growing at 6%-8% - neither significantly behind 2000," opined a statement.

The results were aided by the acquisition of Young & Rubicam, completed on October 4, the deal contributing to a 37% increase in revenues to £3bn.

The global ad industry grew about 6%-7% in 2000, according to WPP, with marketing services ahead at 7%-9%.

WPP itself had enjoyed accelerated growth, particularly in the US, the UK and continental Europe, while Asia Pacific rebounded from 1997’s recession. Latin America likewise showed signs of recovery, mainly driven by Brazil and Mexico. The group believed it had increased its worldwide market share “significantly”.

During the year, WPP had achieved its target of increasing profit margins to 14%. It also renewed its commitment to a margin of 15% in the current fiscal and 15.5% in 2002. The group believed it would hit a 20% margin "over a period of time".

News source: Financial Times