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Sir Martin Sorrell WPP

WPP reports 19% pre-tax profit growth to £1.296bn

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By Stephen Lepitak, -

February 27, 2014 | 3 min read

WPP saw its revenue grow by 6.2 per cent to over £11bn according to its preliminary results for 2013, while also reporting a pre-tax profit increase of 19 per cent to £1.296bn.

Meanwhile the international marketing network has also reported a like-for-like revenue increase for January of 5.7 per cent, and net sales growth of 4.1 per cent.

Reported billings increased by 4.1 per cent to £46.2bn, while like-for-like revenue growth was recorded across all regions, with ‘strong growth’ witnessed in Asia Pacfic, Latin America, Africa and the Middle East.

As a result, WPP has raised its strategic targets over the next five years for the faster growth markets and new media sectors to 40-45 per cent, as suggested by CEO Sir Martin Sorrell earlier this week and reported by The Drum.

This strategy of growth has been accelerated ahead of the merger of Publicis and Omnicom to form the world’s largest marketing network, set to be completed in the coming months.

Over the course of 2013, the group completed 62 deals, including 28 acquisitions and investments, of which 32 were in new media, 22 data investment management companies and two driven by client and agency needs.

In his outlook for 2014, Sorrell said that the year looked likely to be ‘demanding’ adding that the pattern was likely to be similar to that of 2013, with a ‘slightly increased client confidence’ enhanced by the Winter Olympics, FIFA World Cup and the mid-term Congressional Elections in the US.

“Although both consumers and corporates seem to be increasingly cautious and risk averse, they should continue to purchase or invest in brands in both fast and slow growth markets to stimulate top line sales growth. As the former leading chief investment officer of one of the largest investment institutions said perceptively, companies may be running out of ways of reducing costs and have to focus more on top line growth. Merger and acquisition activity may be regarded as an alternative way of doing this, particularly funded by cheap long-term debt, but we believe clients may regard this as a more risky way than investing in marketing and brand and hence growing market share,” he stated.

Earlier this week, Sorrell spoke at a WPP event discussing the importance of fast growing markets, such as China, for the company.

Sir Martin Sorrell WPP

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