By Kevin McCauley
WPP chief Martin Sorrell today reported a 7.4 percent jump in 2011 revenues to $16B as pre-tax profit rose 18 percent to $1.6B.
Organic growth rose 5.3 percent, while growth from acquisitions accounted for a 3.1 percent advance. WPP factors in a one percent decline from currency fluctuations.
The PR group advanced 6.2 percent with Ogilvy PR Worldwide, Cohn & Wolfe and Germany’s Hering Schuppener leading the charge. Operating margins rose 0.3 points to 16.1 percent.
Sorrell says WPP’s “record performance was achieved in difficult circumstances.” He cites lack of strong political Eurozone leadership for triggering uncertainty for consumers and customers throughout the world.
Multinationals, which are sitting on $2T in cash, were “still fearful of making mistakes but prepared to invest in capacity and behind brands in fast –growth markets.”
This year, WPP will benefit from spending for the London Olympics, European soccer championships and the U.S. presidential elections.
For 2013, Sorrell said president Obama, who “seems more likely to be re-elected,” will have to confront the “intimidating U.S. budget deficit, while dealing with a Republican-controlled House of Representative and Senate. Legislative gridlock may continue at a time when kicking the can down the road may no longer be viable.”
Sorrell has budgeted nearly $500M for the acquisition of “reasonably priced small and medium sized companies.” |