PR told to aim for ten per cent margins at WPP

Revenue from advertising and marketing group WPP’s PR operations grew by eight per cent last year, although operating margins lagged behind rivals like Shandwick.

Revenue from advertising and marketing group WPP’s PR operations

grew by eight per cent last year, although operating margins lagged

behind rivals like Shandwick.



Group results for the year ended 31 December 1996 show a nine per cent

rise in revenues to pounds 1.7 billion and pre-tax profits up by 35 per

cent to pounds 153.3 million. Operating profit grew 22 per cent to

pounds 182.4 million.



PR companies contributed six per cent of total revenue and two per cent

of WPP’s pounds 182.4 million operating profits. Hill and Knowlton

continued its return to prosperity with a revenue rise of 8.4 per cent

while Ogilvy Adams and Rinehart’s income moved up by seven per cent.



Despite the revenue growth and a five per cent increase in the PR firms’

operating margins, WPP chief executive Martin Sorrell admitted that

there was still room for improvement. In particular, he said, PR

activities should aim for the ten per cent margins achieved by

Shandwick.



The UK accounted for 19 per cent of WPP’s total group revenue and 15 per

cent of its operating profits. Worldwide new billings rose to pounds 1.3

billion compared to pounds 1.1 billion last year.



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