WPP posts 5.2% rise in billings in first half of the year

The Board of WPP has announced its unaudited interim results for the  six months ended 30 June 2011. The Group says despite recent uncertainties, these results continue the post-Lehman bounceback seen in 2010 and the Group  has now achieved levels of pro-forma revenues and profitability beyond 2008.

The summary of the results are as follows:

• Billings up 5.2% at £21.392 billion. 
• Reported revenues up 6.1% to £4.713 billion and up 8.1% in constant currencies. 
• Like-for-like revenues up 6.1% and gross margin up 6.8%. 
• Headline EBITDA up 10.5% to £619.5 million from £560.8 million. 
• Headline operating margin pre-incentives up 0.8 margin points at 13.9%. 
• Headline operating profit up 13.7% to £517.9 million from £455.3 million, over half a billion pounds sterling for the first time in the first half. 
• Headline operating margin up 0.7 margin points to 11.0%. 
• Headline gross margin margin up 0.7 margin points to 11.9%. 
• Headline profit before tax up 17.1% to £417.0 million from £356.2 million.  
• Profit before tax up 37.1% to £334.3 million from £243.9 million.  
• Diluted headline earnings per share up 19.4% to 22.8p from 19.1p.  
• Diluted earnings per share up 50.8% to 18.1p. 
• First interim ordinary dividend up 25% at 7.46p per share. 
• Estimated net new business billings of £1.201 billion ($1.922 billion). 

Some of the Asia-Pacific trends were:

• As at 30 June 2011, the number of people in the Group increased by 2,634 or 2.4% compared to the proforma figure at 31 December 2010, reflecting net hiring, particularly in the United Kingdom and the faster growing markets  of Asia Pacific and Latin America, which accounted for almost 85% of the new hires and where like-for-like revenue and gross margin growth is particularly strong.

• In Asia Pacific, Latin America, Africa and the Middle East and  Central and Eastern Europe revenues were up over 11% in the second quarter following over 12% growth in the first three months, driven by continued strong growth in Latin America, Australia, South East Asia and Africa, with revenues in each of these areas showing double digit growth.  

• In the first half of 2011, over 28% of the Group’s revenues came from Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe, an increase of 1.0 percentage point compared with the first half of last year and against the Group’s strategic objective of 35-40% in the next three to four years. 

WPP said, "Any slowdown in the growth rate in the  United States is forecast to be balanced geographically, by faster growth in the United Kingdom, Western Continental Europe, from admittedly low levels, and faster growth in Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe. Functionally, any slowdown in traditional media spending, is similarly forecast to be covered by increasing digital spending and, in our case, by continued growth in media investment management."

The Group added, "For the remainder of 2011, the focus will continue to be on ensuring that our operating companies balance revenue, gross margin and headcount growth, while at the same time capitalising on the various client and market opportunities that continue to arise and investing in both existing and new talent,  where necessary. Given recent events our operating companies will be even more cautious about hiring additional staff in the balance of this year."