WPP has warned that revenue from its PR operations are unlikely to
increase significantly thisyearduetocontinuingeconomic uncertainty and
that increased profits will come from improvingoperatingmargins.
WPP’s PR companies broke even in the second half of last year with
revenues risinQ 3.4 per cent to contribute 6.4 per cent of total group
revenue. However, the PR operations did not turn in any operating profit
due to ‘short term excess property costs’.
Hill and Knowlton’s revenue was up by two per cent and operating costs
fell by 2.2 per cent. Ogilvy Adams and Rinehart’s revenue rose by over
seven per cent and operating costs by two per cent.
‘In the medium term, like for-like revenue gains are likely to be in the
shlgle digit range, and in these circumstances the company will continue
to concentrate on improving the balance of its resources and the
flexibility of its costs,’ said WPP chlef executive Martin Sorrell.
‘Firms like Shandwick show operating margins of over ten per cent and
there is clearly an opportunity to improve the performance of our
WPP’s preliminary results show revenue up nine per cent to pounds 1.5
billion and pre-tax profit up 33 per cent to pounds 113 million.