WPP Hikes Growth Forecast As Ad Rebound Accelerates
04 März 2011 - 8:44AM
Dow Jones News
WPP PLC (WPP.LN) Friday said it expects organic revenue growth
of around 5% in 2011, after the rebound in global advertising
accelerated in the final quarter of last year led by the U.S. and
emerging markets.
"The strong finish to 2010 has continued into 2011, with
like-for-like revenues in January 2011 up over 8%," WPP said in a
statement, echoing recent upbeat comments from rivals.
Chief Executive Martin Sorrell told Dow Jones Newswires last
month that preliminary budgets were indicating organic revenue
growth of around 5% for 2011, up from previous indications of 3% to
4% growth.
WPP, whose clients include Unilever N.V.(UN), Johnson &
Johnson (JNJ) and Ford Motor Co. (F), said Friday that organic
revenue growth in the fourth quarter was 8.5%, surpassing the
record 7.5% in the previous quarter, driven by the exceptionally
strong U.S. market combined with rapid growth in Asia and Latin
America but also strong growth in the U.K. Organic revenue strips
out acquisitions, disposals and currency effects.
The Dublin-based owner of advertising agencies including Ogilvy
& Mather, Young & Rubicam and JWT, also said it expects its
operating profit margin to increase 0.5 margin points to 13.7% in
2011 after it posted an improved margin of 13.2% in 2010.
Full-year revenue beat expectations, rising to GBP9.33 billion
from GBP8.68 billion a year earlier. Net profit rose 34% to GBP586
million from GBP437.7 million while profit before taxes and
excluding items--analysts' preferred measure of operating
performance--rose 21% to GBP1.23 billion, also beating market
expectations for GBP1.21 billion.
WPP also said it will lift the dividend pay-out ratio to around
40% from 30% over the medium term after paying a record dividend
for 2010. The company raised its interim dividend by 15% to 11.82
pence a share, bringing the total dividend for the year to 17.79
pence a share.
WPP shares Thursday closed at 837 pence.
-By Ruth Bender, Dow Jones Newswires; +33 1 40 17 17 54;
ruth.bender@dowjones.com
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