WPP buoyant on 2005 performance

Advertising giant WPP has reported strong third quarter results for 2005 – including a 26% revenue increase on the same period last year – and raised its forecast for the full year.

WPP buoyant on 2005 performance
WPP buoyant on 2005 performance

The group reported that revenues for the first nine months of 2005 were up over 23%, or 5.5% excluding acquisitions and currency fluctuations, with the UK and Western Europe region the only slow performer.

Guidance for the full year has been raised to 4-5%, from previous estimates of 3-4% - a faster rate than the industry itself, expected by the group to growth 2-3% in 2005.

The group, home to the MediaCom, Mediaedge:cia and MindShare media agency networks, said it was on track to hit its recently increased operating margin target of 13.7% for the year.

In the first nine months of the year, all regions performed well to the exception of Western Europe.

Revenues for UK and western Continental Europe were up 12%, compared with a growth rate nearing 25% for North America, Continental Europe, and the Asia Pacific, Latin America, Africa and Middle East group.

The advertising and media division was the strongest performer, up 28% since the beginning of the year.

Direct, internet and interactive were strong with OgilvyOne and Wunderman gaining market share. Branding and identity, healthcare and specialist communications revenues were up 23%, PR and public affairs up 15% and information, insight and consultancy up 0%.

WPP added new business billings worth £597m during the third quarter. Nine-months net new business billings were up 45% over the same period last year, as the group benefited from consolidation trends in the industry.

The group predicts the industry will grow 2-3% in 2005. Growth for 2006 is estimated at 3-4%, boosted by the World Cup, Winter Olympics and US Congressional elections.

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