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WPP Results: Research Firms Trail Other Divisions
WPP has reported third quarter revenues up 4.9% to £1.48 billion - a rise of 8.1% in constant currencies. The Information, Insight and Consultancy division underperformed the group as a whole but grew a respectable 4.8% at constant currencies, to £218.5m.
The group said the strength of the £ sterling against the US dollar was the chief factor in reducing its revenue growth by just over 3%. On a like-for-like basis, excluding the impact of acquisitions and currency fluctuations, revenue growth continued the trend from the first half of the year, at just under 5%.
Growth was particularly strong in Asia Pacific, Latin America, Africa and the Middle East where revenue was up 13.8%; North American revenues rose 8.0%, a slight reduction on the first half at 8.3%; and Central and Eastern Europe continued to shine with a rise of more than 26%.
The group's Information, Insight and Consultancy division, which includes Millward Brown, Research International and many other research firms, improved on growth of just 3.3% in the first half, and contributes around 14.8% of the group revenue total. The division's growth beat that for advertising and media investment management (just under 4%) but puts it well behind the lead performers, the branding and identity, healthcare and specialist communications segments, whose revenues grew more than 16%, and public relations and public affairs - up almost 11%.
In the first nine months of 2007, group reported revenues were £4.401 billion, up 3.0% or 7.8% at constant currencies. On a like-for-like basis, excluding the impact of acquisitions and currency fluctuations, revenues were up 5.1% and gross margin up 5.4%. WPP had net new business billings of £703 million ($1.371 billion) in Q3 and $4.422bn in the first nine months of this year.
Looking forward, the Board expect a healthy 2008 with the combined impact of the US presidential election, the 2008 Olympics in Beijing and (more modestly) the European football championships - but say 2009 offers a more uncertain prospect.
The Group continues to focus on its strategic objectives on improvements in operating profits, margins, staff cost to revenue ratios and growing revenue faster than industry averages. Web site: www.wpp.com.
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