WPP first-half profits jump to US$546 million

Despite growing signs of a slowdown in the global economy, the holding company led by Sir Martin Sorrell (pictured) still saw increased client spending, as well as pulling in net new business estimated at US$1.2 billion.

Revenues rose 6.1 per cent to US$7.7 billion, although the group claimed it was disadvantaged by the strength of sterling against the dollar.

Advertising and media buying was easily the best performing sector within WPP as well as the biggest, notching up 10.4 per cent growth to US$3.19 billion. Consumer insight grew least at 1.3 per cent, while PR was up 3 per cent and branding, healthcare and specialist was up 5.7 per cent.

However, organic growth, also at 6.1 per cent, lagged the rates recorded by rivals Omnicom and Publicis during the second quarter.

Growth in the US has slowed, but compensating for this was, "somewhat surprisingly", 7 per cent growth in the UK to US$917 million, as well as some growth in Western Europe and by a "last-in, last-out recessionary recovery" in the rest of the world.

Sorrell's prediction of a LUV-shaped recovery [the letters applying respectively to Western Europe, the US and developing markets], made last year, "remains battered but intact", according to his group's update.

The company stuck behind its full year growth forecasts somewhat diffidently, after admitting revenues in July grew at the slower rate of 4.3 per cent.

It now expects full year like-for-like revenue growth to be at "very similar levels" to the 5.9 per cent growth across the first seven months of the year.

It sounded a note of warning in observing the effect of the latest stock market crisis on consumer and client thinking has yet to be seen.

It said: "Given recent events our operating companies will be even more cautious about hiring additional staff in the balance of this year."

However, it signalled it will be getting more aggressive with acquisitions, having restricted itself to spending US$163 million per year in the wake of digesting market research firm TNS in 2008.

It has raised its budget to US$652 million for this year and is targeting small and medium-sized companies focused on new markets, new media and consumer insight.

New business wins during the period included Revlon global creative for Y&R and Taxi and DFS UK media for MediaCom, offset by the loss of Y&R's Bacardi global creative account.

This article was first published on campaignlive.co.uk