Television

WPP 2002 revenues, net profit show decline

http://www.indiantelevision.com/sites/default/files/styles/smartcrop_800x800/public/images/tv-images/2015/10/15/Untitled-1_36.jpg?itok=VGIHBukq

LONDON: The board of WPP Group plc (WPP) has announced reportable revenue down to ?3.908 billion (almost three per cent). Revenues including associates are estimated to total ?4.644 billion.



The net profits before tax as per the unaudited preliminary results for the year ended 31 December 2002 released today show a decline of 50 per cent, to ?205.4 million. The board however declared a final dividend up 20 per cent to 3.67p per share making a total for the year of 5.40p up 20 per cent over 2001.



The following are the highlights of the results for 2002:



* Revenue down almost three per cent to ?3.908 billion.

* Profit before goodwill and impairment, interest, tax, fixed asset gains and investment write-downs down over 14 per cent to ?480.2 million.

* Operating margins of 12.3 per cent.

* Profit before tax, goodwill and impairment, fixed asset gains, investment write-downs and FRS17 interest down almost 19 per cent to ?400.6 million.

* Profit before tax down 50 per cent to ?205.4 million.

* Diluted headline earnings per share down over 19 per cent to 24.9p from 30.9p.

* Final dividend up 20 per cent to 3.67p per share making a total for the year of 5.40p up 20 per cent over 2001.

* Strong estimated net new billings of over ?2.4 billion ($3.6 billion). Ranked top on absolute net new billings won in 2002.



A press release states that despite very difficult trading

conditions throughout the world, these results reflect the achievement of balancing the market pressure on revenues against reducing costs.



On a constant currency basis, revenue was up 0.7 per cent and gross profit up 0.9 per cent. Like-for-like revenues, excluding the impact of acquisitions and on a constant currency basis, were down 5.9 per cent. Over the four quarters of 2002, like-for-like revenues have fallen by decreasing amounts - more than -9 per cent in quarter one, -8 per cent in quarter two, more than -3 per cent in quarter three and less than -3 per cent in quarter four.



In quarter four, North America showed revenue growth for the first time for seven quarters of almost 2 per cent.

Profit pre-goodwill and impairment, interest, tax, investment gains and writedowns was down 14.4 per cent to ?480.2 million from ?561.1 million and down almost 12 per cent in constant currencies. Pre-goodwill and impairment, reported operating margins (including income from associates) fell to 12.3 per cent from 14.0 percent.



Excluding income from associates, reported operating margins fell less, by 1.4 per cent from 12.9 per cent to 11.5 per cent. Post goodwill and impairment, reported profit before interest, tax, investment gains and write-downs was down 44 per cent to ?302.5 million from ?546.3 million.



Before incentive payments totalling ?90.1 million or over 16 per cent (under 14 per cent in 2001) of operating profit before bonuses, taxes and income from associates, operating margins fell to 13.8 per cent from 14.9 per cent, reflecting stronger performance of

some operating units against last year and increased provision for the LEAP senior management incentive programme, due to stronger than anticipated WPP total shareholder return against the peer group.



Reported operating costs including direct costs fell by almost 1 per cent, but rose by almost 3 per cent in constant currency. However, like-for-like total operating and direct costs were down 4.6 per cent on the previous year. Staff costs excluding incentives were flat, as were

total salaries. Non-staff costs rose as a proportion of revenues, primarily reflecting the lumpiness of property costs as capacity is reduced.



On a reported basis the groups staff cost to gross margin ratio, excluding severance and incentives, increased slightly to 56.9 per cent from 56.6 per cent. Variable staff costs as a proportion of total staff costs have increased over recent years, reaching 12.1 per cent in 2000. The impact of the recession in both 2001 and 2002 has reduced this ratio to 9.2 per cent and variable staff costs as a proportion of revenue to 5.3 per cent.



This highlights the benefits of the increased flexibility in the cost structure. Actual people numbers averaged 50,417 against 50,487 in 2001, down marginally. On a like-for-like basis, average headcount was down

to 50,417 from 55,109, a decrease of over 8 per cent. At the end of 2002 staff numbers were 49,439 compared with 52,670 at the end of 2001 on a pro-forma basis, a reduction of over 6 per cent. Headcount numbers have been falling by approximately half of one percent per month.



Net interest payable and similar charges (including a charge for the early adoption of FRS17) increased to ?86.4 million from ?71.3 million, reflecting lower cash generated from operations, the full year impact of the increased level of acquisition activity in 2001 and share repurchases and cancellations in the current year. Headline interest cover remains at the relatively conservative level of almost six times and at six times, excluding the FRS17 charge.

Profit before tax, investment gains and write-downs fell by over 44 per cent to ?302.5 million from ?546.3 million. On a constant currency basis, pre-tax profits were

down almost 43 per cent reflecting the strengthening of sterling against the dollar, counterbalanced to some extent by its weakness against the euro. If sterling

had stayed at the same average levels as 2001, profits on this basis would have been ?315.2 million.



The Groups tax rate on headline profits was 26 per cent, down from 27 per cent in the previous year, reflecting the impact of further improvements in tax planning.

Diluted headline earnings per share were down over 19 per cent at 24.9p. In constant currency, earnings per share on the same basis were down under 16 per cent.



All severance and restructuring costs have been included in operating profits.



Following the collapse in technology equity valuations in 2001, it was considered prudent to write down the net balance sheet value of the groups investments in this area by ?70.8 million.



 2002 has seen further declines in

these technology investments, many of which are in private companies. An additional write-down of ?19.9 million has been taken in 2002, mitigated by gains on asset disposals of ?9.2 million. The carrying value of these investments is now written down to ?19.3 million.



In addition, a further ?145.7 million was taken as an impairment charge primarily reflecting accelerated amortisation of goodwill on first generation

businesses which have suffered in the recession.



This additional charge represents 3.2 per cent of the goodwill shown in the balance sheet at the start of 2002.



As a result, profit before tax fell 50 per cent to ?205.4 million and diluted earnings per share by almost 68 per cent to 7.7p.



The Board recommends an increase of 20 per cent in the final dividend to 3.67p per share, making a total of 5.40p per share for 2002, a 20% increase over 2001.



The record date for this dividend is 6 June 2003, payable on 7 July 2003. The dividend for 2002 is four and a half times covered by headline earnings.

Latest Reads

http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/02/20/big.jpg?itok=k7-mTi1Q
Big Synergy appoints Simmi Karna to produce fiction series for OTT, TV

Anil D Ambani-owned Reliance Entertainment's Big Synergy, a content creation and production company, is powering its fiction content team and has appointed Simmi Karna to produce fiction series for OTT and broadcasters.

Television Production House Fiction
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/02/20/kc.jpg?itok=6xwLc11l
An afternoon of Food, Family and Fun - COLORS’ presents ‘Kitchen Champion’

A culinary experience like no other, COLORS is here to take viewers on a flavourful journey through its newest offering in the afternoon slot, ‘Kitchen Champion.

Television TV Channels GECs
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/02/20/krishna.jpg?itok=puHo88-e
&TV’s Paramavatar Shri Krishna stands tall at Kumbh Mela 2019

Celebrating the spirit of the Hindu legends and the holy river of the Ganges, the ongoing Ardh Kumbh at Prayagraj is seeing over millions of pilgrims currently.

Television TV Channels GECs
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/02/20/ipl.jpg?itok=67yPOP-U
GEC, regional channels' viewership to dip further this year due to IPL, Elections

This summer, India is set to witness two major events, the Indian Premier League (IPL) and the much awaited General Elections, clash for votes and viewership. For the broadcast industry, those with general entertainment channels (GECs) are likely to see even further dip in eyeballs because of this.

Television TV Channels Viewership
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/02/19/dsport.jpg?itok=cVe7auOu
DSPORT to telecast Afghanistan vs Ireland ICC cricket series in India

DSPORT, a premium sports channel of Discovery Communications, will broadcast LIVE the upcoming Afghanistan - Ireland ICC cricket series.

Television TV Channels Sports
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/02/19/news18.jpg?itok=7EVGa18m
News18 Network announces 2nd edition of rising india summit

With the theme ‘Beyond Politics: Defining National Priorities’, News18, India’s largest news network, is coming up with the second edition of its marquee thought-leadership initiative-News18 Rising India Summit 2019.

Television TV Channels News Broadcasting
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/02/19/mtv.jpg?itok=yqyPURDA
MTV captivates Roadies’ fans with a thrilling stunt on a billboard

India’s No.1 Youth Brand, MTV continues to be the frontrunner in the category and has upped the ante with India’s first ever stunt on a billboard which was created on Saturday, 9th February.

Television TV Channels Music and Youth
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/02/19/sony-pix.jpg?itok=vk827L_1
Sony PIX brings to you ‘Hollywood’s Finest’ - the ultimate countdown to Oscars 2019

Ninety-one years of recognising and applauding the best of talent in the movie business, Oscars is the most looked forward to event in Hollywood.

Television TV Channels English Entertainment
http://www.indiantelevision.com/sites/default/files/styles/340x340/public/images/tv-images/2019/02/19/spn.jpg?itok=0NSole9x
The SPN National Inclusion Cup 2019 A CSR initiative of Sony Pictures Networks India

Sony Pictures Networks India (SPN), with a view to shape the future of the less privileged youth of the country, has associated with Slum Soccer to sponsor the ‘SPN National Inclusion Cup 2019’ for the third time in a row.

Television TV Channels Sports

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories