Acquisitions upturn boosts WPP
Advertising giant WPP has said first-quarter revenues grew 12% as companies returned to the acquisition trail following the economic slowdown.
The group said revenues from its global agencies, including Ogilvy & Mather and J Walter Thompson, totalled £960.3m (€1.4bn) in the first three months of 2004.
Several large contracts were sealed with new and existing clients as optimism returned to the corporate arena, translating into net new business billings for WPP of £514m (€762m).
"There are an increasing number of new business opportunities as clients turn their attention to managing for growth at the top line, rather than focusing totally on costs," WPP said.
WPP is one of the world's biggest advertising and public relations firms, with more than 55,000 staff and 1,400 offices.
After stripping out the acquisition of debt-laden UK rival Cordiant last year, WPP recorded a fifth consecutive quarter of revenue growth with like-for-like turnover ahead 4%.
All its regions except continental Europe grew revenues by more than 10% in the first three months, with turnover in the UK ahead almost 12% year-on-year.
Signs that economic recovery was gathering momentum in its major markets was visible in higher spending on public relations and public affairs, up 6% in the period.
WPP has stated previously that it expects advertising and marketing spending to rise by at least 3% in 2004 - boosted by events such as the US elections and Athens Olympics.
The group, which also owns Young & Rubicam and the Hill & Knowlton PR business in the UK, said profitability and operating margin were above budget in the first quarter. But executives remained alert to the impact of currency swings on the balance sheet with reported revenues up only 6% after accounting for the weakness of the US dollar.
