WPP's DIM Revenue Declines, but Profits Rise

WPP has reported that revenue in its Data Investment Management (DIM) arm fell slightly (0.3%) to £1.173bn during the first half of the year, from £1.176bn in last year's first six months; while DIM headline profit before tax rose 11.7% to £100.6m from £88.1m a year earlier.

The DIM division (previously known as Consumer Insights) houses Kantar companies including TNS, Millward Brown, The Futures Company and many other specialist firms. In 2014, DIM's share of total WPP revenue fell from 23% to 21%, and now stands at 20.1%.

H1 net sales for the division rose slightly (1.7%) to £856.7m, with a stronger second quarter (up 2.9% to £450m). The quarter also saw revenue up 0.8% to £616m - these increases were partly driven by the acquisition of a controlling interest in IBOPE in Latin America.

Overall, the group reported a 6.8% rise in revenue to £5.84bn for the first half or 2015. During the period, headline profit before tax was up 12.1% to £596m, and profit before tax climbed 44.5% to £709.7m. Operating profit rose 48.5% to £788.9m, and headline EBITDA was up 6.7% to £782.0m from £732.9m in H1 2014. Billings increased 5% to more than £23bn in the first six months of 2015.

Commenting on the results, CEO Sir Martin Sorrell (pictured) said that despite a need for the advertising and marketing services sector to remain positive, general client behaviour does not reflect that state of mind, as tepid GDP growth, low or no inflation and consequent lack of pricing power encourage a focus on cutting costs to reach profit targets, rather than revenue growth.

Note that the above are reported figures - constant currency figures are not hugely different - for example net sales rose 4.7%, revenue 6.4% and headline EBITDA 6.7% with currency effects removed.

Web site: www.wpp.com .