WPP posts record 2006 profits

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WPP chief Martin Sorrell is expecting an even stronger 2007.

WPP, the world's second-largest advertising and marketing company, posted a better than expected 14.5 percent increase in full-year headline pre-tax profit on Friday, at 766.3 million pounds ($1.49 billion).

The company, home to ad agencies Young & Rubicam and JWT, said reported revenue was up almost 10 percent to £5.9 billion, with like-for-like revenue up 5.4 percent.

Analysts on average expected pre-tax profits of £761 million and revenues of £5.88 billion, with like-for-like revenue at 4.9 percent, according to a poll of 10 analysts.

WPP's third-quarter like-for-like revenue fell short of analysts' expectations and pushed its shares down at the time five percent, but CEO Sir Martin Sorrell told Reuters in January that he expected 2006 revenues to be "better than expectations" with 2007 even stronger.

The company said like-for-like revenue growth had accelerated in the fourth quarter to 7.2 percent.

The company said the operating margin was up 50 basis points to 14.5 percent and it aimed to achieve operating margin targets of 15.5 percent in 2008 and 16.0 percent in 2009. It increased the dividend by 20 percent to 7.61 pence.


"The group's financial performance in the year more than mirrored the continuing steady strength in economic conditions across the globe, with even the weakest geographical region, Western Europe, picking up in the second half," it said.

Emerging markets of Asia Pacific, Latin America, Middle East and Africa outperformed the group with double-digit revenue growth.

Group businesses including Landor Associates in Dubai and Fitch in Qatar were singled out in the financial results for particularly strong performance.

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