British advertiser WPP says profits rocket in first half

24th August 2010, Comments 0 comments

Marketing giant WPP said Tuesday that first-half net profits rocketed 39.1 percent, as the global advertising market recovered more quickly than expected from a sharp economic downturn.

Profits after tax rallied to 150.8 million pounds (184 million euros, 232 million dollars) in the six months to the end of June, which compared with 108.4 million in the equivalent part of 2009, WPP said in a results statement.

Revenues rose by 3.5 percent to 4.08 billion pounds in the reporting period, the Dublin-based firm added.

"The results reflect the recovery in the world economy, following the massive fiscal and monetary stimulus in response to the sub-prime, insurance monoline, Lehman and other elements of the crises," the group said.

WPP owns a number of advertising agencies including Ogilvy & Mather, Young & Rubicam, JWT and also Taylor Nelson Sofres, which it bought for 1.2 billion pounds in 2008.

Advertising agencies are recovering from the lingering effects of the global financial crisis, during which many companies slashed their spending in response to the credit crunch and deep economic downturn.

Meanwhile, WPP forecast Tuesday that growth in annual organic revenue -- a closely-watched measure that strips out acquisitions, disposals and currency effects -- was likely to exceed 3.1 percent.

And the company lifted its interim shareholder dividend by 15 percent to 5.97 pence per share.

"Mild expansion has replaced fear and stabilisation," WPP said in the earnings release, adding that the recovery was particularly speedy in the United States.

"In our 25 years of existence, we cannot remember a more speedy recovery or turnaround of a region."

However, the group also issued a cautious outlook, citing factors ranging from the eurozone debt crisis, the impact of national austerity measures, and fears of a sharp US economic slowdown.

© 2010 AFP

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