Kantar Firms Continue 2010 Growth

Kantar-owner WPP has reported improved results for the first five months of the year. Both Group revenues and those for the Insight division rose around 2% worldwide on a like-for-like basis while growth in May was well over 5%.

Chairman Philip Lader told shareholders at the Company's 38th Annual General Meeting in Dublin today that the improvement has been driven by the US, UK, eastern Europe and south-east Asia.

The US shows 'remarkably strong like-for-like growth, continuing in April and May, with combined revenue growth of over 7% and well over 5% year to date' while the UK also continues to grow - still at over 4% in April and May. Continental Europe overall was flat, with a better performance in Eastern Europe balanced by a slight decline in the West. Russia and the Czech Republic performed well, with revenue growth in the first five months of over 12% and almost 7% respectively. Asia-Pacific growth has been driven by Greater China, India, Singapore and Japan: revenue growth in mainland China is over 7% in the first five months, with India even stronger at almost 12%.

All sectors show very similar like-for-like revenue growth at 2.0% or just over, except for advertising and media investment management which is just under at 1.7%. Consumer insight grew at slightly over 2.0%, while the global advertising businesses (including 'soggy' Western Europe) returned to growth in May, the first time since November 2008. Consumer insight revenues have also strengthened markedly in the last two months, up well over 5%.

As in the first quarter, revenues, profits and operating margins were well above budget and all three measures, including revenue, are ahead of last year.

The Group budgeted flat revenue overall for 2010, as it turned out 'somewhat conservatively' said Lader. Revised forecasts suggest the improvements of the first five months will - on a like-for-like basis - continue for the balance of the year. Headcount reduction of 12% in 2009 has been followed by a slight increase, particularly in faster growing markets - overall headcount is up slightly over 1% at the end of the five months following January 1.

However, Lader insisted on continued caution, citing problems with the economies of Greece, Portugal, Spain and Ireland; fears of the impact of the UK Government's new austerity programmes and similar plans in France and Italy; of the withdrawal of fiscal stimulus in Germany; and for US growth later this year as tax cuts end.

The Group made a number of small acquisitions or increased equity interests in the first five months of 2010.

Lader finished with a little philosophy: 'It has been a pretty bumpy ride - and it is not over yet. Nor, in one sense, will it ever be over...' due to the need never to be complacent. However he said that turbulent times had reminded us of 'an easily forgotten basic truth: if you do what you are paid to do outstandingly well, everything else will follow.' He concluded that the company's 'current [good] state of health is not simply the result of some mysterious top-down discipline called management: it's the result of the outstanding work that those tens of thousands of inventive individuals have delivered for their clients.'

Web site: www.wpp.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.

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