Across the year, like-for-like revenue growth in the division – which includes Burson Cohn & Wolfe, Hill + Knowlton Strategies and Finsbury - was 2.6 per cent, reaching £1.13bn.
WPP said "all regions showed strong growth" in PR and Public Affairs, with growth in the UK and Africa & the Middle East "particularly strong".
"Cohn & Wolfe, H+K Strategies and the specialist public relations and public affairs businesses Finsbury, Hering Schuppener and Buchanan performed particularly well," the company added.
Operating margins in PR and public affairs improved by 0.1 points to 16.2 per cent, as profit before interest and tax increased from £183m to £184m, year-on-year.
These results were better than the rest of the WPP group.
Across the group, revenue excluding pass-through costs dipped 0.4 per cent on a like-for-like basis to £12.83bn in 2018.
Headline underlying earnings (EBITDA) fell 6.4 per cent on a constant currency basis to £2.31bn. Pre-tax profits were down 28.1 per cent (stripping out currency fluctuations) to £1.46bn. WPP said this reflects the impact of restructuring and transformation costs and goodwill impairment.
CEO Mark Read said: "Our results for 2018 are at the upper end of the guidance we provided in October, with like-for-like revenue less pass-through costs down 0.4 per cent.
"As we have said previously, 2019 will be challenging – particularly in the first half – due to headwinds from client losses in 2018. However, we start the year with fewer clients under review than we did in 2018, and investments in creativity and technology will further improve the competitiveness of our offer."
He added: "Since September, we have made good progress in implementing the new strategy for WPP. We have set out our vision for a more client-centric WPP, simplified our offer through the creation of two new integrated networks, VMLY&R and Wunderman Thompson, realigned our US healthcare agencies with major networks, formed the company’s first executive committee and begun the process of seeking a financial and strategic partner for Kantar. Through 36 disposals since April 2018, we have strengthened our balance sheet and streamlined our business, raising £849m of cash proceeds in 2018.
"We are showing early signs of success in attracting new business and new talent to WPP. The newly formed VMLY&R, for example, has enjoyed a strong start, with client wins totalling $25m in its first 90 days. The quality of our creative work has been exceptional, with six WPP spots featuring at this year’s Super Bowl and work such as Grey’s ‘The Best Men Can Be’ for Gillette demonstrating once again the global impact of what we do.
"We are at the beginning of a three-year turnaround plan, but WPP’s new positioning as a creative transformation company with stronger, more integrated, more tech-enabled agencies is already proving effective, having driven several of our recent new business successes. As we implement our strategy in 2019 we will continue to put creativity, technology and great work for clients at the heart of our own transformation."
Across the group, like-for-like revenue fell three per cent in North America, where overall revenue was £5.37bn. Like-for-likes grew 1.5 per cent in the UK (£2.19bn), and 1.7 per cent in Western Continental Europe (£3.34bn).
Growth was strongest in the Asia Pacific, Latin America, Africa & Middle East and Central & Eastern Europe region, where like-for-like revenue rose 4.4 per cent – overall revenue in these regions was £4.7bn.
'Tough year ahead'
Analyst Edison Investment Research suggested that, despite improvements towards the end of the [financial] year, areas of concern remained.
Fiona Orford-Williams, analyst at the firm said: "Financial year 2018 ended up at the top end of the range – not necessarily a ringing endorsement, but the dividend is maintained (at a 56 per cent payout); 2019 is going to be a tough year as the client losses from 2018 impact.
"Net debt at 2.1x EBITDA is clearly outside the target range of 1.5-1.75x, but they reckon they’ll get back to this by financial year 2021.
"Generally, Q4 was an improvement on Q3, but major areas of concern remain, including advertising and healthcare in North America, which seems reluctant to respond to treatment.
"The restructuring plan is being cracked on with. Savings to date are in line with guidance and 70/100 office mergers, 57/80 office closures, 2,650/3,500 planned redundancies already achieved.
"They have to get the top line moving and this is recognised with a shift in incentives to be 50 per cent based on revenue less pass-through costs, 50 per cent on operating profit and margin.
"Medium-term targets are...to get back to organic revenue growth in line with peers by financial year 2021, with margins back over 15 per cent and cash conversion of 80-90 per cent. Is that exciting? No, but it’s not disastrous, which has been the way that the share price has been pointing."