WPP bullish on Olympics, fiscal rev up 7.4% to ?10.02 bn

MUMBAI: WPP, the world‘s biggest advertising group, has posted a net profit of ?916.5 million for the fiscal ended 31 December, up 38.7 per cent over the earlier year, and expects the Olympics to give it a further boost this year.

WPP‘s strong performance in a slowdown year has been led by companies spending towards brand building in emerging markets. It has also managed to protect its market share in the matured markets.

Revenue grew by 7.4 per cent to ?10.02 billion, from ?99.33 billion in the previous fiscal.

Geographically, the Asia Pacific, Latin America, Central and Eastern Europe and Africa and Middle Eastern region posted maximum year-on-year growth in revenue at 12.5 per cent. The total revenue from the region was ?2.95 billion in 2011 as compared to ?2.62 billion in 2010.

Meanwhile, UK registered a growth of 8.8 per cent recording an revenue of ? 1.18 billion as opposed to ?1.10 billion in 2010.

The Western Europe region grew at 7.7 per cent with the revenue increasing from ?2.23 billion in 2010 to ?2.51 in 2011.

The region to show least growth was North America with 2.7 per cent increase in revenue. The region’s revenue for 2010 was ?3.3 billion while in 2011 it registered revenues of ?3.39 billion.

Sector wise, the group’s advertising and media investment management wing brought in revenue to the tune of ?4.12 billion in 2011, up 11.4 per cent compared to ?3.73 billion in the year ago period.

The consumer insight business grew marginally (at 1.1 per cent) to ?2.5 billion.

The PR and public affairs business recorded growth of 4.8 per cent earning the group ?886 million in 2011, compared to ?845 million in 2010.

The branding and identity, healthcare and specialist communications sector brought in a revenue of ? 2.5 billion, marking a growth of 8.5 per cent from last year’s ?2.3 billion.

In the fiscal under review, the WPP group made 24 acquisitions and investments in new markets, 32 in new media and eight in consumer insight. The remaining seven acquisitions were driven by individual client or agency needs.

WPP said the group’s budget for the year 2012 would be made on conservative basis and will reflect on the faster growing geographical markets like the APAC, Latin America, Africa and Central and East European markets. The focus will be on increasing the revenues and gross margins faster than the industry average.

The London Olympics, the Uefa Football Championships and November’s US Presidential Elections alone will grow advertising revenues by 1 per cent this year, helping WPP to meet its budgeted forecast of 4 per cent revenue growth, the group stated.

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