WPP AUNZ remains conservative in growth forecast citing ‘challenging market’

Lindsay Bennett
By Lindsay Bennett | 24 August 2018
Mike Connaghan

WPP AUNZ is remaining “appropriately conservative” in its outlook for the full year 2018, predicting 3% growth and citing a “challenging market” for retail and consumer facing brands in its half year results.

The holding company posted modest organic growth, improving its half-year profit before tax by 3.8% from $41.9m to $43.4m. Its net sales were up 1.5% to $416.3m and EBITDA at 1.9x.

WPP AUNZ’s most profitable segment was its advertising and media investment management arm, which encompasses ad agencies including Ogilvy and Y&R, as well as GroupM agencies. It increased its net sales by 4.7% to $232.8m.

Its overall headline margin increase was just 0.3% which WPP AUNZ CEO Mike Connaghan said in the investor call today was “disappointing”. WPP AUNZ’s most improved segment was its public relations business, which includes agencies such as PPR and Pulse Communications, which posted a 3.3% increase in overall margin.

“On a divisional basis, we experienced varied performances across our key areas of operation,” Connaghan said.

“Advertising and Media Investment Management showed good growth in net sales and maintained their operating margin. Digital business again performed strongly and have maintained their earnings momentum.

“The Public Relations and Public Affairs segment has seen growth across the portfolio, a pleasing turnaround from previous periods. While, the Data Investment Management and Branding and Identity businesses experienced pressure from market softness, particularly retail clients.”

WPP AUNZ flagged production, data, e-commerce, marketing infrastructure and digital transformation as its key growth areas.

Earlier this week WPP opened a new digital agency in Sydney within J. Walter Thompson, absorbing the group's existing digital agency Webling.

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