NEWS: WPP PR returns remain static

WPP has warned that revenue from its PR operations are unlikely to increase significantly this year due to continuing economic uncertainty and that increased profits will come from improving operating margins.

WPP has warned that revenue from its PR operations are unlikely to

increase significantly this year due to continuing economic uncertainty

and that increased profits will come from improving operating margins.



WPP’s PR companies broke even in the second half of last year with

revenues rising 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

single 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 chief 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 PR

activities.’



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.



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