WPP profits soar more than 50% in first half

24th August 2011, Comments 0 comments

Global marketing giant WPP said Wednesday that first-half profits jumped 53 percent, boosted by strong growth in Asia, Latin America and Britain, despite the uncertain outlook.

Earnings after tax soared to £230.7 million (264 million euros, $381 million) in the six months to June from £150.8 million a year earlier, WPP said in a results statement.

Revenues meanwhile increased 6.1 percent to £4.7 billion.

In reaction, WPP shares rallied 3.02 percent to 597.50 pence on the London FTSE 100 index of leading companies which was up 0.04 percent in late morning deals.

"Despite recent uncertainties, these results continue the post-Lehman bounce-back seen in 2010," WPP said.

The group's net profits had jumped by more than a third in 2010 as the company recovered from the global financial crisis and the spectacular collapse of US investment bank Lehman Brothers.

"The shares have had a rocky run of late as investors have raised concerns on corporate advertising spend given the fragility of the recovery, especially in the US," said analyst Richard Hunter at Hargreaves Lansdown Stockbrokers.

"However, this slowdown has been more than compensated by a robust performance from some of its other markets, most notably Asia, Latin America and even the UK."

He added: "The company remains well regarded by investors, despite the difficult economic headwinds."

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

In July, the group snapped up a majority stake in Indian advertiser Mindset for an undisclosed sum.

However, WPP also issued a cautious outlook on Wednesday, citing current turmoil on global financial markets which have been gripped in recent weeks by fears of another vicious worldwide recession.

"So far so good in 2011, with forecasts in reasonable heart, but there are storm clouds and we still have to see how the latest stock market crisis affects consumer and client thinking and actions," WPP said.

"Given the fact that most client budgets and plans are calendar year, any impact may not be felt until 2012.

"And in 2012 we will have the ... positive impact of the London Olympics and Paralympics, the Eastern European-based UEFA European Football Championships and, most importantly, the United States presidential elections."

© 2011 AFP

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