MAM

WPP first quarter revenues up 16%

MUMBAI: WPP's acquisition of Grey Global has resulted in a sliver lining if one goes by the revenues that former has garnered post the take over. WPP's revenues have seen a 16 per cent rise on the first quarter of 2005, which primarily reflecting strong organic growth and a first-time contribution from Grey from 7 March.

 

 

The impact of currency in the first quarter of 2005 was minimal. On a like-for-like basis, excluding acquisitions and currency fluctuations, revenues were up almost six per cent. This maintains the improvement in the organic growth rate of the last two quarters of 2004 and reflects the growing focus by clients on improving profitability through innovation and branding and top line growth, rather than by relying solely on cost cutting.

In all the regions that WPP has a presence in, a double digit revenue growth has been seen. In North America, revenues were up over 16 per cent; in Europe, the UK was up 12 per cent and Continental Europe up over 15 per cent.. Asia Pacific, Latin America, Africa and the Middle East was up 22 per cent.

 

 

By communications services sector, advertising and media investment management was up over 17 per cent, information, insight and consultancy up 19 per cent, public relations and public affairs up over 12 per cent, and branding and identity, healthcare and specialist communications up almost 15 per cent.

The net new business billings of GBP 875 million ($1.62 billion) were won during the first quarter. The Group has continued to benefit from consolidation trends in the industry, winning several large assignments from existing and new clients.

 

 

In the first quarter both profitability and operating margin were ahead of budget. Full year margin forecasts are in line with the Group's revised combined margin target for 2005, including Grey, of 14.3 per cent.

Also, WPP's operating companies continued to improve productivity. On a pro-forma basis, the number of people in the Group (excluding associates) was up 3.8 per cent as of 31 March 2005 to 71,097, as compared to the previous year. In Q1 2005, average headcount on a like-for-like basis was up 5.2 per cent to 64,368, compared with Q1 2004.

Balance Sheet and Cash Flow

WPP has continues to implement its strategy of using free cash flow to enhance share owner value through a judicious combination of capital expenditure, acquisitions and share cancellations, whilst ensuring that these expenditures are covered by free cash flow.

Average net debt in Q1 2005 was down GBP 240 million to GBP 586 million, compared to GBP 826 million in 2004. The current net debt figure compares with a market capitalisation of approximately GBP 7.5 billion. Net debt at 31 March 2005 was GBP 938 million compared to GBP 825 million in 2004 -- an increase of GBP 113 million, reflecting a GBP 384 million gross cash payment for Grey.

In the twelve months to 31 March 2005, the Group's free cash flow was GBP 572 million. Over the same period, the Group's capital expenditure, acquisitions and share cancellations were GBP 646 million (including a GBP 384 million gross cash payment for Grey).

In the first quarter of 2005, in addition to the completion of the acquisition of Grey, the Group made acquisitions or increased equity interests in advertising and media investment management in the United Kingdom, Denmark and Argentina; in information, insight and consultancy in Hong Kong; in public relations and public affairs in Denmark; in healthcare in the United States, Netherlands and Switzerland; and in direct, Internet and interactive in the United States.

In Q1 2005, 3,367,000 ordinary shares were purchased, at an average price of GBP 6.17 per share and total cost of GBP 20.8 million. 2,250,000 of these shares were cancelled. The company's objective remains to repurchase up to two per cent annually of its share base in the open market at an approximate cost of GBP 150 million, when market conditions are appropriate.

WPP will also be looking at focusing on its key objectives of improving operating profits by 10 per cent to 15 per cent per annum; improving operating margins by half to one margin point per annum; improving staff cost to revenue ratios by 0.6 margin points per annum; growing revenue faster than industry averages; improving our creative reputation and stimulating co-operation among Group companies.

WPP head honcho Sir Martin Sorrell was quoted in a media report as saying, "The continually increasing cost in network television, the fragmentation of media, and the development of new technologies are all moving the market toward direct, interactive and Internet."

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/02/19/redington_0.jpg?itok=47d4qszR
Redington unveils new global brand identity

Redington, the $6 billion distribution and supply chain giant for international brands in the IT and mobility sectors, has unveiled its new global brand identity with a new logo and tagline – Seamless Partnerships.

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/02/19/aegon_0.jpg?itok=_z2N9asB
Aegon Life Insurance focuses on relieving tension in new ad

Aegon Life Insurance has recently launched its new media campaign, ‘Aegon Toh Tension Gone’ which focuses on relieving financial stress through its insurance solutions.

MAM Marketing MAM
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/02/19/future.jpg?itok=kIhNygib
Future Group's aLL assigns creative duties to Marching Ants

MUMBAI: Future Group’s aLL - The Plus Size Store has assigned its creative duties to Marching Ants. Salt is the incumbent agency on the account. Confirming the win, Marching Ants director and chief creative strategist Joy Ghoshal adds, “Early in its life cycle, The Plus size fashion category...

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/02/19/tinder.jpg?itok=3ym7aDoi
Tinder peeks into a world of possibilities in latest ad

MUMBAI: Every swipe on Tinder represents the possibility of meeting someone new and interesting, and starting something epic - an epic friendship, a crazy adventure or an epic love story. The possibilities are endless and quite literally in the palm of your hand. Tinder’s new digital film brings...

MAM Marketing MAM
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/02/19/tan.jpg?itok=5VXQ1BvA
Publicis Media bags digital mandate for ZEE5

MUMBAI: Publicis Media has won the full digital duties of ZEE5 in India, the newly launched digital entertainment platform from Zee Entertainment Enterprises Limited (ZEEL). The business was won as part of a multi-agency pitch. Zenith India group CEO Tanmay Mohanty says, “The OTT segment in India...

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/02/16/auto.jpg?itok=8gy1PmJy
Crabtree celebrates laziness in latest campaign

Crabtree has taken up Mullen Lintas Delhi for its latest campaign promoting home automation solutions.

MAM Marketing MAM
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/02/17/Sam_Balsara.jpg?itok=XtbZChot
Pitch Madison report forecasts 2018 digital adex growth at 25%

MUMBAI: According to the findings of the 16th Pitch Madison Advertising Report (PMAR) 2018, the advertising market slowed down to 7.4 per cent (Rs 53,138 crore) in 2017. The report also predicts the advertising growth in 2018 to be around 12.03 per cent thereby adding Rs 6,392 crore to adex to...

MAM Marketing MAM
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/02/16/priya-warrier.jpg?itok=dL0iN4uI
Net sensation Priya Varrier promotes Pringles

At a time when the whole wide world seemed to be lingering around with cupids and love-struck angels, Kellogg’s popular potato crisps brand and the world's second-largest potato chips player Pringles created a frenzy by striking the right chord with singles!

MAM Marketing Brands
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/02/16/onlinelove.jpg?itok=SD3Wb5jH
Digital takes centre stage on tepid Valentine's Day for brands

MUMBAI: Love has been in the air and on the internet all week. Valentine’s Day is no longer about just a day you spend with your loved one but is rather a week-long affair of gifts and celebration. Valentine’s Day has become no less than a festival in India, a country that takes much pride in its...

MAM Marketing Brands

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories