WPP Income Up Despite Economic 'Armageddon'

WPP has reported a 16% increase in Q3 revenues to £1.7bn ($2.87bn), but experienced flat operating margin in the first nine months of the year. As a result of the disintegration in the financial markets, the group predicts that 2009 will be a 'very tough year'.

In constant currencies, the group revenue rise equates to an increase of 6%, which the firm says reflects the strength of the Euro and US dollar against the pound. On a like-for-like basis, excluding the impact of acquisitions and currency fluctuations, revenue growth was 3%.

For the first nine months of the year, revenue was up nearly 15%, which in constant currencies is a gain of 7.5%, and on a like-for-like basis, is just less than 4%.

Insight and consultancy arm Kantar - which includes Research International, Millward Brown, Henley Centre, Headlight Vision and now TNS, as well as other specialist agencies - grew 4.0% to £246.7m during the quarter, on a constant currency basis.

On the same basis, for the first 9 months of the year, the Kantar division grew 6.1% to £733m, from £650m in the prior year period.

WPP's £1bn bid for TNS expired yesterday, when 96% of TNS shareholders accepted the offer. Once the TNS acquisition is complete, the firm will become part of Kantar, while retaining its identity.

WPP CEO Sir Martin Sorrell said the acquisition will brings in £15bn pounds of revenue to the group, and will rank Kantar as one of the world's leading data and information groups alongside Nielsen.

Commenting on the current pessimism in the stock markets, Sorrell said: 'Whatever the pattern, it is not likely that our budget will reflect the Armageddon currently predicted by the fall in stock prices.'

However, earlier today, shares in WPP fell 2.3% following its gloomy forecast for 2009.

Web sites: www.wpp.com and www.kantargroup.com .

In a separate note, WPP has announced that 99.86% of its shareholders have voted in favour of the firm
establishing a new UK listed, Jersey holding company, that will be tax resident in the Republic of Ireland.

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