Ads giant WPP sees profits plummet
Advertising giant WPP today reported a 47% drop in profits and predicted 2010’s big events such as the FIFA World Cup and US Congressional elections will fail to lift performance.
The firm said reported pre-tax profits were £179.3m (€204m) in the six months to June 30, down from £338.5m (€385.7m) a year earlier.
WPP said the impact of the recession on the its profitability in the first half was “severe” and its efforts to cut costs, including slashing its workforce, were “insufficient as revenues fell faster than budgeted”.
Group revenues were £4.3bn (€4.9bn), up 28.4% on last year but down 8.3% on a like-for-like basis, which excludes the impact of acquisitions and currency movements.
The figures reflected a 7.8% like-for-like fall in advertising revenues and a 8.2% decline for public relation and public affairs.
Chief executive Martin Sorrell said: “Although it is still very early to budget or forecast what may happen in 2010, top line revenues will probably be ’even Steven’, despite the positive impact of the Winter Olympics in Vancouver, the World Expo in Shanghai, the Asian Games in Guangzhou, the FIFA World Cup in South Africa and the mid-term Congressional elections in the United States.”
