Buoyant Times at WPP 27/07/00 At the recent WPP Annual General Meeting, the chairman, Martin Sorrell was suitably upbeat about the group's recent performance and its plans for the rest of the year. Over the first five months of 2000, worldwide revenues at WPP were up by over 18% on a constant currency basis. Revenues in North America were up 19%. In Europe, the UK was up almost 11% and Continental Europe was up 20%. Asia Pacific, Latin America, Africa and the Middle East grew by over 24% reflecting the continuing economic recovery in those regions. By business sector, advertising and media investment management was up over 16%, information and consultancy up almost 23%, public relations and public affairs up almost 45% and branding and identity, healthcare and specialist communications up almost 10% with gross margin up over 20%. At market research operation Kantar revenues rose by almost 23%. The highlight of the first five months of 2000 was the announcement of the agreement by the boards of directors of WPP and Y&R to a merger of the two companies. This combination creates the strongest marketing communications company in the world with 1999 pro-forma capitalised billings of US$56 billion , revenues of US$5.2 billion and operating profits of over US$700 million with over 55,000 people in 1,300 offices in 92 countries. The group is continuing to make significant progress in winning new business from existing and new clients, with major assignments, amongst others, from Clear Money, Digital NY Times, ING Barings, iPlanet, Kellogg, KPMG, Miller, NCR, Nestle, People PC, SAP, Seagrams, Sears, Telefonica, Unilever, US Mint and Vision Express. Trading margins continued to improve in the first five months in line with the Group's business plan. This calls for an increase in operating margins of at least 0.6% in 2000, and following the merger of Young & Rubicam, by a further 1% to 15% in 2001 and a further 0.5% by the year 2002. The Group's financial strategy continues to be focused on three objectives: Increasing operating profit by 15% to 20% per annum. Increasing operating margins by 0.6% or more per annum depending on the level of revenue growth. Reducing staff cost to revenue ratios by 0.3% per annum or more again depending on the level of revenue growth. Professionally the parent company's two objectives will be to both encourage greater co-ordination and co-operation between Group companies where this will benefit clients and staff and to improve the creative product. In this context, talent is being developed in five areas: In human resources, with innovative recruitment programmes, training and career development, and incentive planning. In property, which includes radical re-design of the space used as well as the more mundane utilisation of surplus property. In procurement, to ensure WPP's considerable buying power is being used to the benefit of clients. In information technology, to ensure that the rapid improvements in technology and capacity are deployed as quickly and effectively as possible. In practice development where cross-brand approaches are being developed in a number of product or service areas: media investment management, healthcare, new technologies, new markets, privatisation, internal communications, retailing, financial services, entertainment and media and hi-tech.