WPP increases profits but warns of growth slowdown
WPP, the advertising and marketing agency built by Martin Sorrell, has reported a 7% rise in pre-tax profits to £358m in the first half of its financial year.
Revenues were also up 3.6% to £4.97bn though Sorrell is expecting a slow down for H2. Significantly, Sorrell said that he plans to move the company’s HQ back to London from Dublin – a decision that follows proposed changes in rules regarding the taxation of foreign profits. "The decision to return to the United Kingdom has been approved by the board and will require share owners' consent at an EGM planned for December 2012,” said Sorrell.
WPP’s US business saw a slight decline but there was double digit growth in markets like Latin America, India and China, areas which Sorrell has talked up repeatedly in recent years.
"2012 started reasonably well with a strong first quarter and slightly slower second quarter," summarised Sorrell. "There has been some slowing of revenues in Western Continental Europe affected by the continuing Eurozone crisis. On the other hand, the UK, Asia Pacific, Latin America and Africa and the Middle East continue to grow strongly. As a consequence, our operating companies are hiring cautiously and responding to any geographic, functional and client shifts in revenues."