WPP's pre-tax profits up 2.8 per cent to £1.49bn

Martin Sorrell: the chief executive of WPP
Martin Sorrell: the chief executive of WPP

WPP has reported pre-tax profits of £1.49 billion for 2015, up 2.8 per cent year on year.

According to the holding company’s preliminary results for last year, WPP’s revenue was £12.24 billion, up 6.1 per cent compared to 2014. Revenue in constant currency was up 7.5 per cent.

The owner of MediaCom and Ogilvy & Mather reported a group headline profit before tax of £1.62 billion, up 7.3 per cent  (up 11.2 per cent when adjusted for exchange rate fluctuations).

WPP’s revenue in the UK was £1.78 billion, up 8.4 per cent year on year. The group reported an increase in like-for-like sales of 2.9 per cent. Revenue growth in the UK was lower in the fourth quarter of 2015 at 6.6 per cent, compared to 7.6 per cent in Q3.

UK operating profit climbed to £243 million in 2015, up 10 per cent year on year. 

The group reported like-for-like revenue growth in all regions, led by strong growth in North America, in all sectors except for data investment management, which was down by 0.1 per cent.

WPP said there was particularly strong growth last year in advertising and media investment management – up 8.2 per cent to £5.55 billion – as well as branding and identity, healthcare, and specialist communications, which climbed 7.7 per cent to £3.31 billion. 

Despite another record year for WPP, which celebrated its 30th birthday in 2015, the company warned of "Don Draperish" general industry optimism being misplaced.

In its financial statement today, the company said: "To survive in the advertising and marketing services sector, you have to remain positive, indeed optimistic, seeing the glass half-full and industry and company reports generally continue, understandably, to reflect that attitude.

"However, general client behaviour does not reflect that state of mind, as tepid GDP growth, low or no inflation and consequent lack of pricing power encourage a focus on cutting costs to reach profit targets, rather than revenue growth.

"In addition, there seem to be little, if any, reasons for an upside breakout from the current levels of real or nominal GDP growth, which remain stuck around 3 per cent to 4 per cent and below the pre-Lehman trend rate, which by definition was unsustainable."

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