Australia ‘below average’ as WPP profits ‘ravaged’ by strong pound
WPP, the owner of Grey, George Patterson Y&R, GroupM and J. Walter Thompson, reported a small increase in pre-tax profit because of the strength of the British pound, but saw “strong growth” in net sales growth of 7.5 per cent in Asia Pacific for the second quarter of this year.
In the company’s Q2 earnings report to shareholders, WPP described its three per cent fall in billings – to £22.060 billion ($39.2 billion) – as having been “ravaged” by the strength of the British currency, although in constant currency billings were up 5.7 per cent.
Australia was one of 14 markets banded in the below average net sales growth bracket with an increase of less than 5 per cent coming this year.
WPP reported a 1.5 per cent increase rise in pre-tax profit, to £532m ($882 million), but without currency adjustments profits were up 15.6 per cent.
The analyst presentation reveals some key points not covered above
– Place greater emphasis on awards
– Australia was below average in terms of growth and the only WPP region to experience negative net sales growth
– Australia to get ‘Shared Service Centres’ to improve operating margins.
http://www.wpp.com/~/media/fil....._aug14.pdf
Interesting that WPP are concerned that clients are cutting costs rather than investing in marketing. You only have to talk to a WPP employee for 5 mins before they start to whinge about cost cutting, no pay increases, hiring freezes etc