Dividends hiked 38 per cent at WPP

Media and advertising giant WPP has broken through the £1bn profit barrier for the first time as revenues hit a record £10bn. And the positive trend is set to continue as the Olympics, European Football Championships and US presidential elections are all set to buoy growth this year. As a result, chief executive Martin Sorrell expects like-for-like revenue growth of 4 per cent in 2012 and, with further improvement in margins on the cards – operating margin rose from 13.2 to 14.3 per cent last year – broke Numis Securities has upped its 2012 EPS estimate from 70p to 74p (67.6p in 2011).

Net new billings advanced 7 per cent to £3.2bn last year, as WPP successfully capitalised on continued consolidation within the media industry. Growth was also driven by operations in fast-growing markets such as Asia Pacific, Latin America and central and eastern Europe. In fact, revenues from these regions surged 12.6 per cent to £2.95bn. The UK businesses registered solid growth, too, with sales up 8.8 per cent to £1.18bn.

Divisionally, the core advertising and media investment management business enjoyed a robust performance. Revenues rose 12.2 per cent to £4.2bn and, with margins improving, this drove operating profit up 16 per cent to £668m. The branding, identity and specialist communications unit also recorded impressive 10 per cent revenue growth, and a 25 per cent hike in profits to £360m.

visible-status-Standard story-url-result_WPP_010312.xml