French advertising group Publicis, number three worldwide, reported on Thursday a record net profit in 2011 and said it might buy back an 11 percent stake owned by the Japanese group Dentsu.

The French company's net profit gained 14 percent on an annual basis to 600 million euros ($796 million), on sales that were 7.3 percent higher at 5.816 billion euros.

Publicis also posted record free cash flow of 704 million euros.

"We are extremely satisfied, it was a fine performance," chief executive Maurice Levy was quoted by a statement as saying.

Investors were less sure however, and shares in the company fell by 1.37 percent to 39.22 euros in early trades on the Paris stock exchange.

The CAC 40 index of leading shares was 0.51 percent higher overall, meanwhile.

Levy underscored a 30-percent increase in the company's digital activities and 24 percent growth in emerging markets like Brazil and China as key factors behind the results.

The group has also focused on cutting costs, which allowed it to realise an 8.8 percent gain in its operating margin to 931 million euros.

Looking ahead to 2012, Levy said Publicis had "a good dose of confidence, though we know the year will be marked by uncertainty."

Advertisers were more prudent and were making decisions on a "much more short-term" basis, he added.

"In 2012, instead of a great year, we could have a good year," Levy said.

Positive developments for the advertising sector this year include the US presidential elections, Summer Olympics in London and the European football championships.

But Publicis would maintain its dividend at 70 euro cents per share in light of a possible buyback of the roughly 11 percent stake in the group owned by Dentsu of Japan.

"We are waiting for Dentsu's position, we think they will decide during the first half" of the year, Levy said.