WPP's first quarter revenues up 18 per cent

MUMBAI: Advertising conglomorate WPP Group PLC has reported an 18 per cent rise in it's first quarter revenue with record new business and strong growth across most of the group. The acquisition of Grey Global was also instrumental to this growth to an extent.

The agency said that revenues excluding currency fluctuations and acquisitions for the three months to 31 March rose to ?1.37 million, in line with analyst forecasts and from ?1.11 billion a year earlier.

The Middle East region has become the fastest growing region for WPP, while Asia Pacific, India and China continued their rapid growth. "Asia Pacific remains strong, with India and China continuing the rapid growth seen in 2005, with first quarter like-for-like revenues up sharply again. Western Continental Europe, although still relatively more difficult, has seen some improvement, particularly in Germany," the agency said.

The agency also said that it was on track to increase operating profits by 10-15 per cent annually.

However, WPP said that Britain remains the slowest advertising market in the world as the agency had reported strong first-quarter double digit growth across all its territories but its home region, which recorded a growth of nine per cent. "All regions, with the exception of the United Kingdom, showed double digit revenue growth," WPP said in a trading update.

WPP said like-for-like revenues rose almost five per cent and that it had won a record level of new business for the quarter at ?1.30 billion.

The agency is also considering increasing its share buyback programme, two per cent of total shares annually, at a cost of about ?175 million, buoyed by favourable market conditions.

"Given the group's cash flow of over $1 billion and under-geared balance sheet, it may be advantageous to repurchase more outstanding shares. In the first quarter of 2006, shares were repurchased for cancellation at an annualised rate of 2.5 per cent. The (rise in like-for-like revenue) maintains the improvement in the organic growth rate of the last eighteen months, which began with the last two quarters of 2004 and continued through 2005. This also reflects the continued relatively benign economic environment across the world and the continued strength of the US economy," the agency said.

The strongest growth for the agency came from media investment management, which was fuelled by demand for online and interactive marketing and communications. WPP's public relations and public affairs grew by just over 14 per cent, consultancy by almost 10 per cent.

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