LONDON—WPP Group, parent company of international public relations agencies including Burson-Marsteller, Cohn & Wolfe, GCI Group, Hill & Knowlton and Ogilvy Public Relations Worldwide, saw its public relations and public affairs revenues rise by 12.4 percent last year, with like-for-like revenues up by a solid 5.9 percent.
The company said growth at Ogilvy, H7K, B-M and Cohn & Wolfe was particularly strong, and also singled out its Finsbury and Buchanan financial communications brands in the U.K. In addition, it said operating margins had continued to improve and were now over 15 percent, an improvement of 1.1 margin points over the previous year.
Overall, WPP revenue was up 9.9 percent to £5.908 billion, with like-for-like revenue up 5.4 percent. Headline operating profits before interest and tax were up 13.8 percent to £859.0 million from £754.8 million and profit before tax was up 15.2 percent to £682.0 million from £592.0 million. Diluted headline earnings per share up 16.7 percent to 42.0p from 36.0p.
WPP chief executive Sir Martin Sorrell said the company was increasingly enjoying benefits of scale in areas such as media buying, and from the synergies between agencies. An estimated 35 percent of new business across the group involved two or more companies in the group working together, he said.
He also told analysts and reporters that he expected WPP to grow faster than the overall advertising and marketing services market in 2007. “We are talking about the market [growing organic revenues] by about 4 percent and our budgets being about 4 to 4.5 percent and our budgets tend to be conservative,” he says.
He is particularly bullish on the U.S., where he says the 2008 presidential election and the Olympic Games could add about one percent to the global ad market’s organic growth.