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Slow Q1 Growth for WPP Research Divisions
Marketing giant WPP has reported first quarter revenue growth of 4.3% on a like-for-like basis, excluding acquisitions and currency. Due to an 11% decline in the US dollar against sterling, group revenue fell 0.7% to £1.366bn and that for the Information, Insight & Consultancy division fell c.5% to £204m.
The division, which includes RI and Millward Brown among many other global MR brands, grew slower than the business as a whole, up 1.4% in like for like terms, with gross margin up 5.5%.
End of year results for 2006 showed MR revenues standing at £892.9m (up 11.2% on the previous year), with strong performances confirmed by a number of its MR brands including Lightspeed Research, Millward Brown and BMRB (www.mrweb.com/drno/news6487.htm ). The group also recently added analytics and marketing strategy firm DataCore Marketing to its portfolio of research firms (www.mrweb.com/drno/news6605.htm ).
The London-based company, led by CEO Martin Sorrell, said in a statement that at constant currencies first quarter revenues were up 6.3%, equivalent to 4.3% like-for-like (ie excluding acquisitions), while gross margin was up 4.6%.
On this constant currency basis, Asia Pacific, Latin America, Africa and the Middle East are the fastest growing regions, with revenues up almost 12%. The UK remained the slowest growing region with revenues up just 2% and gross margin up 3%, reflecting the significance of market research revenues in the United Kingdom. The firm says that as more MR is being conducted online, both revenue and direct costs are reduced, and as a result, gross margin is probably the better measure of performance.
WPP won net new business billings of £516m in the first quarter and says the full-year operating margin was in line with its target of 15%. WPP shares closed at 771 pence yesterday, valuing the company at £9.48bn. The group is online at www.wpp.com .
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