PR revenues slump at advertising and communications group WPP

Advertising and communications group WPP reported today that its PR and public affairs revenues dropped by 8.2 per cent in the first half of 2009, on a like-for-like basis.

WPP chief executive: Sir Martin Sorrell
WPP chief executive: Sir Martin Sorrell

The group, which owns Hill & Knowlton, Burson-Marsteller and Ogilvy PR, noted that PR and public affairs saw 'some detoriation' compared to the first quarter of this year, when the unit's revenues fell by 4.3 per cent.

Reported revenues for the division actually rose to £403.4m, compared to £356.1m in the first half of 2008 due to the effects of currency movements and acquisitions. On a constant currency basis PR and public affairs revenue fell by 6.9 per cent year-on-year and dropped 8.2 per cent with acquisitions factored in.

Profit, meanwhile, slumped to £46.6m after reaching £57.2m in the same period one year earlier.

The results bear out WPP chief executive Sir Martin Sorrell's prediction earlier this year. Speaking to PRWeek in April, Sorrell questioned the resilience of the PR industry and forecast a tough few quarters ahead.

PR and public affairs was harder hit than advertising and media, which dropped by 7.8 per cent. The pressure on the unit was most marked in Continental Europe and Latin America. Reported operating margins fell by 4.4 points to 11.7 per cent.

Overall results demonstrate a tougher second quarter than anticipated for WPP. Like-for-like revenues were down by 8.3 per cent, although they rose by 8.6 per cent once the acquisition of research firm TNS is factored in. Reported revenues for the first half of 2009 were £4.3bn, compared to £3.3bn in the first half of 2009. Billings increased by 11 per cent to £18.7bn, although headline operating profit dropped by 35 per cent, in constant currencies.

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