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Profits up, WPP's Sorrell politely reacts to the new giant on the block

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By Noel Young, Correspondent

August 29, 2013 | 3 min read

London-based advertising giant WPP today raised its full-year sales goal as clients in the UK and the US invested more heavily in advertising in the second quarter.

WPP's Sir Martin Sorrell: Upbeat

The move, reported by the Wall Street Journal, came barely a month after rivals Publicis and Omnicom said they plan to replace WPP as the world's largest ad agency with their merger.

WPP, owner of agencies including Young & Rubicam and Ogilvy & Mather, said it expects organic revenue growth of more than 3 per cent for 2013, compared with its previous target of "around 3 per cent," with growth set to accelerate in the second half of the year.

WPP had hinted earlier in the year that its revenue may surpass its target - which excludes acquisitions, disposals and currency movements - following stronger growth in the UK and some improvements in Europe.

WPP's upbeat tone comes after Omnicom of the US and France's Publicis, the world's number 2 and 3 ad companies, said they had agreed to merge in a $35bn deal to create the world's largest ad firm.

Martin Sorrell, WPP's chief executive, has "shrugged off talk" that he will buy another rival to regain the top position, the WSJ reports.

WPP said it will accelerate its current strategy of expanding in emerging markets and digital advertising and now aims to generate at least 40 per cent to 45 per cent of its revenue in emerging markets and through digital services by 2018.

It announced organic revenue growth of 2.7 per cent in the second quarter, an improvement on the 2.3 per cent posted for the first four months, driven by strong growth in the UK and emerging markets, as well as improvements in the US and Western Europe.

Net profit rose 1.1 per cent to £280.9m in the six months ended June 30, from £277.8m a year earlier. Sales rose 7.1 per cent to £5.33bn, from £4.97bn in the same period last year.

Profit before interest, taxes, and exceptional items - the key figure tracked by analysts - rose to £637m from £570m last year.

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