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
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.