Record pre-tax profits for WPP as they rise 7% to £1.3 billion in 2012
International marketing services group WPP has announced another record financial year in 2012 with a rise in pre-tax profit of seven per cent at £1.3 billion.
The company, which owns the likes of Kantar Worldwide, MEC, Lambie Nairn, Coley Porter Bell, Kinetic Worldwide and acquired digital businesses AKQA and Fortune Cookie last year, saw revenue grow by 3.5 per cent during 2012 to £10,373 billion although it did see its billings fall to over £44.4 billion due to the strength of Sterling currency the company claimed.
Pre-tax profit grew to a record high for a second year, growing by 7.1 per cent, however the company's net debt also increased by £373 million (13 per cent) to £3.203 billion, principally due to the AKQA acquisition. 2012 saw WPP complete 65 acquisitions in total with an estimated spend for this year at around £300 to £400 million per annum, with a focus on growing markets.
Like-for-like gross margin growth was at 2.4 per cent while pre-tax operating profit also increaded to £579 million (16.3 per cent) in North America and to £173 million (13.6 per cent) in the UK.
Advertising and media investment management was the most profitable arm of the business, delivering an increase in pre tax profit of 17.7 per cent to reach £755 million with revenue of £4,273 million.
Continuing into 2013, the company has said that like-for-like margins for January were two per cent ahead of last year and claims that 'the pattern' for 2013 looks similar to that of last year.
"2013 looks to be another demanding year. There will be no maxi- or mini- quadrennial events and, as mentioned above, the United States deficit and debt remain ignored," said the statement, looking towards 2014 for more large scale event activity such as the World Cup in Brazil and the Winter Olympics in Sochi.
Speaking to The Drum last week Sir Martin Sorrell, CEO of WPP revealed that he found the current economic turmoil to be both the most interestingng and challenging ache had faced in his career.