WPP beats rivals as pre-tax profits leap by 18.7%
(Guardian Web Via Acquire Media NewsEdge) WPP has reported an 18.7% leap in pre-tax profits to £1.29bn for 2013, outperforming its marketing sector rivals.
Sir Martin Sorrell's marketing services group was boosted by a strong performance across its advertising, media and PR divisions in the UK which helped it overcome slower growth at its data investment division.
WPP is the last of the four big marketing services groups to report its financial figures.
Its 18.7% jump in pre-tax profits beat that of Publicis, up 8.8% to £900m; Omnicom, up 2.8% to £612m; and IPG, down 13% to £358m.
The merger between Omnicom and Publicis, which will eclipse WPP as the biggest player in the market, is expected to receive final approval in the coming months.
Full-year revenues at WPP were up 6.2% at £11.01bn. The UK was a strong performer for WPP in 2013, with revenues up 10.9% to £1.41bn.
Its media and advertising business in the UK – which include the advertising agencies JWT, Ogilvy and media agencies Mindshare and Maxus – helped operating profits increase by 15.7% to £205m.
Its UK PR division – which includes Hill + Knowlton and Burson-Marsteller – also performed strongly in the year.
However, its data investment management unit, made up of the Kantar group which includes TNS and Millward Brown, struggled to match the UK growth rates across the rest of the business.
WPP attributed this to companies using their own data, as opposed to being reliant on third-party information.
WPP's big advertising networks of JWT, Ogilvy & Mather, and Grey performed well in North America, while Y&R performed strongly in the UK.
The group made 62 acquisitions in the year, 32 of which were in new media.
Sorrell has said that he is not in the market for making a mega-deal but will instead focus in making new acquisitions in the new markets of digital and data investment management.
WPP said it anticipated "slightly increased client confidence" in 2014, buoyed by the Fifa World Cup in Brazil.
However it added that "All in all, 2014 looks to be another demanding year, as a strong UK pound and weak fast-growth market currencies continue to take their toll on our reported operating margins."
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