Ireland-based advertising titan WPP Group Plc (WPPGY), at its Trading Update for the first five months of 2010 reported encouraging results with revenues, profits and operating margins well above its expectations. The company anticipates similar performance for the rest of 2010, with like-for-like revenue growth expectation of 2.0%.
Worldwide revenue increased 1.8% for the first five months of fiscal year 2010, on a reportable basis. Excluding acquisitions and currency translation impact, revenues were up 2.0% and in constant currencies, soared 2.2% due to the relative strength of pound sterling against US dollar and Euro.
From a geographical perspective, for the first five months of 2010, continuous strength was seen in the United States, the United Kingdom and Asia-Pacific. Results were, however, flat for Continental Europe as modest strength from the Eastern region was offset by weakness in the Western region.
The business segments of WPP Group including Consumer Insight, Public Relations and Public Affairs, and Branding and Identity, Healthcare, and Specialist Communications improved roughly 2.0%. Advertising and Media Investment Management’s growth was at 1.7%, compared with negative growth of 0.9% reported in the first quarter of 2010, primarily due to roughly 5.0% growth witnessed in April and May.
Five-month period ending, average net debt was ₤3.121 billion ($4.5 billion), down from ₤3.391 billion ($5.4 billion) in 2009. Free cash was ₤900 million ($584.4 million) after deduction of cash utilized for information technology and property. The company repurchased around 4.5 million shares for approximately ₤28.6 million ($44.0 million).
The advertising giant, WPP Group Plc, is a leading provider of advertising and communications services worldwide. New markets, new media and consumer insights are the company’s three areas of strategic focus. Prime competitors include Interpublic Group of Companies Inc. (IPG), Omnicom Group Inc. (OMC) and PUBLICIS GROUPE S.A. We currently maintain our Outperform recommendation on the stock.
Worldwide revenue increased 1.8% for the first five months of fiscal year 2010, on a reportable basis. Excluding acquisitions and currency translation impact, revenues were up 2.0% and in constant currencies, soared 2.2% due to the relative strength of pound sterling against US dollar and Euro.
From a geographical perspective, for the first five months of 2010, continuous strength was seen in the United States, the United Kingdom and Asia-Pacific. Results were, however, flat for Continental Europe as modest strength from the Eastern region was offset by weakness in the Western region.
The business segments of WPP Group including Consumer Insight, Public Relations and Public Affairs, and Branding and Identity, Healthcare, and Specialist Communications improved roughly 2.0%. Advertising and Media Investment Management’s growth was at 1.7%, compared with negative growth of 0.9% reported in the first quarter of 2010, primarily due to roughly 5.0% growth witnessed in April and May.
Five-month period ending, average net debt was ₤3.121 billion ($4.5 billion), down from ₤3.391 billion ($5.4 billion) in 2009. Free cash was ₤900 million ($584.4 million) after deduction of cash utilized for information technology and property. The company repurchased around 4.5 million shares for approximately ₤28.6 million ($44.0 million).
The advertising giant, WPP Group Plc, is a leading provider of advertising and communications services worldwide. New markets, new media and consumer insights are the company’s three areas of strategic focus. Prime competitors include Interpublic Group of Companies Inc. (IPG), Omnicom Group Inc. (OMC) and PUBLICIS GROUPE S.A. We currently maintain our Outperform recommendation on the stock.
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