WPP returns to growth with 36 per cent profit lift

WPP has reported a 36 per cent growth in profit before tax to US$353.8 million for the first half of 2010.

Billings are up 8.5 per cent to US$29,483 billion of which US$3,382 billion is attributed to net new business billings of almost double last year's volume.

Revenue increased 3.5 per cent to US$6,439 billion. North America and the UK return a 5.8 and 2.8 per cent growth in revenue respectively whereas Western Continental Europe is still suffering with a 0.2 per cent decline. Germany, Italy, Norway, Sweden and Turkey showed strong growth but France, Spain and Portugal remain tough.

Asia-Pacific, Latin America, Africa, Middle East and Central and Eastern Europe posted a 0.7 per cent growth in revenue. Revenues were up 3 per cent in Q2 compared to -2 per cent in Q1, driven by particularly strong growth in Southeast Asia. Africa was up 3 per cent largely due to ad spend surrounding the FIFA World Cup in South Africa.

Like-for-like revenue is up 2.5 per cent for the first half of the year and up 3.1 per cent after seven months with July showing the strongest growth of 7 per cent.

The results represent a marked recovery from this time last year, when Sorrell was forced to admit the recession had had a "severe" impact on WPP after profits slumped by almost half (47 per cent) to US260 million.

Speaking to CNBC on the day of results, Sorrell was upbeat about the group’s recovery since it reported organic revenue falling through the floor a year before.

He said, "We feel better about the environment. There have been sequential improvements, except for a mild flutter in June, but it has improved again in July, and so I think we feel pretty good about the rest of the year."

WPP, home to agencies JWT, Grey and Ogilvy & Mather, also stated it does not expect the economy to enter into a 'double-dip' recession, but warned that growth will be uneven and at varying speeds.

Sorrell upped the 2010 forecast for WPP from flat to two per cent growth following three months of "stabilisation" in May this year.