WPP posts strong financials despite clients remaining spooked by GFC

By (incomplete) | 26 August 2014
 
WPP chief executive, Martin Sorrell.

WPP reported double digit profit growth and predicted another strong year despite clients sitting on cash piles and looking to cut costs rather than grow top line revenues.

The company reported profit before tax up 15 per cent for the first half of 2014. Revenues at the group grew 2.7% to GBP5.47bn. Billings dipped 3 per cent to GBP22.06bn.

In its interim report, the group highlighted the performance of media agency holding unit, GroupM.

GroupM, “which includes Mindshare, MEC, MediaCom, Maxus, GroupM Search and Xaxis, together with tenthavenue, generated net new business billings of £1.759 billion ($2.815 billion). This new business performance ranks top of the class in all new business surveys in the first half, as in the last two years”, said the company.

However, WPP said that clients in general remained risk averse as geopolitical tensions – civil wars, the Middle East crisis, and the reverberations of the financial crash of 2007-2008 – weighed heavily on the collective corporate mind when it came to spending their cash reserves.

“Understandably, but perhaps inadvisedly, [clients] remain focussed on achieving their profitability objectives by cutting costs, rather than by growing the top-line,” the company stated.

Despite those concerns, if forecasts are met, 2014 would be another strong year as would 2015 in general for the advertising industry, the company stated.

Click on the graphic below to download the full statement.

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