WPP Predicts 2008 Stronger Than 2007


WPP, the world's second-largest advertising and marketing company, on Friday posted 2007 like-for-like revenue growth in line with forecasts and said 2008 should be better following record business wins.

WPP CEO Optimistic on '08

The group, whose agencies include JWT and Young & Rubicam, said it had not felt any impact from global financial crises but warned again that the "real world" could be affected in 2009.

WPP reported like-for-like growth, a key industry metric which strips out the impact of acquisitions and currency fluctuations, of 5 percent.

Analysts said they expected the lack of any negative surprises and the relatively robust outlook statement to restore confidence. 

"We have only preliminary data for January in 2008 and this shows like-for-like revenues up 5 percent," the company said. "On the basis of these data, 2008 should be a better year than 2007, against the views of most economic forecasters, who predict a gloomy 2008."

Its shares closed lower by 2.5 percent at 596.50.

The group reported 2007 revenues of 6.19 billion pounds ($12.27 billion) and adjusted pretax profit of 817 million pounds, ahead of analyst forecasts at 811 million pounds.

It said the operating margin targets of 15.5 percent for 2008 and 16 percent for 2009 would remain.

WPP was boosted in the final quarter of 2007 with "an historically unprecedented run of net new business wins" including accounts from AT&T and Dell giving it estimated net new billings of 5.03 billion pounds for the year. 

For 2008, it said it expected worldwide advertising and marketing services spending to rise by at least 4 percent and with WPP to grow in excess and therefore increase share.

WPP Chief Executive Martin Sorrell has said for some time that 2008 ad budgets would be boosted by the U.S. Presidential election, the Beijing Olympics and soccer's Euro 2008 Championship.

The group recommended a 20 percent increase in the final dividend to 9.13 pence per share, making a total of 13.45 pence per share for 2007, a 20 percent increase over 2006.