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.
WPP (WPP) | ||||
|---|---|---|---|---|
| ORD PRICE: | 831p | MARKET VALUE: | £10.5bn | |
| TOUCH: | 830.5-831p | 12-MONTH HIGH: | 855p | LOW: 561p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 12 | |
| NET ASSET VALUE: | 529p | NET DEBT: | 35% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007 | 6.19 | 0.72 | 39.6 | 13.5 |
| 2008 | 7.48 | 0.75 | 38.4 | 15.5 |
| 2009 | 8.68 | 0.66 | 35.9 | 15.5 |
| 2010 | 9.33 | 0.85 | 47.5 | 17.8 |
| 2011 | 10.02 | 1.01 | 67.6 | 24.6 |
| % change | +7 | +18 | +42 | +38 |
Ex-div: 6 Jun Payment: 9 Jul *Includes intangible assets of £11.3bn, or 896p a share | ||||
