Ireland-based advertising titan WPP Group plc (WPPGY) provided trading update for the first four months of 2012 at its annual general meeting held on June 13, 2012.
The company’s top line in the first four months of 2012 grew 7.0% year over year to ?3,228 million (US$5,093.9 million) on the back of strengthening businesses in all sectors and geographies.
Constant currency revenue growth was registered at 7.4% while excluding the impact of acquisitions and currency fluctuations, revenue was up 4.0% in the reported period.
From a geographical perspective, WPP Group experienced a noticeable growth in Asia Pacific, Latin America, Africa, the Middle East and Central & Eastern Europe; where revenue grew by 11.3% year over year on a constant currency basis.
Revenue in North America grew 5.1% while the United Kingdom registered a 4.2% revenue growth. Western Continental Europe recorded like-for-like revenue growth of 2.0%.
Of the four business segments, revenue from Advertising & Media Investment Management segment increased 8.2% year over year. Consumer Insight revenue grew by 3.3%.
Branding & Identity, Healthcare and Specialist Communications segment revenue was up 10.0% while revenue from Public Relations & Public Affairs grew 7.0%.
First four months of 2012 saw profits and margins grow above the target. Average net debt climbed roughly 15% year over year. The company completed 24 acquisitions and bought back roughly 5.5 million shares.
For the fiscal year 2012, management expects to achieve like-for-like revenue and gross margin growth of over 4%. Headline operating margin is expected to improve by 50 basis points.
Based in Dublin, Ireland, WPP Group together with its subsidiaries provides advertising and communications services worldwide. The Group faces competition from its peers like Interpublic Group of Companies Inc. (IPG), Omnicom Group Inc. (OMC), and Publicis Groupe SA (PUBGY.PK).
We currently maintain a Neutral recommendation on WPPGY. The stock also bears a Zacks #3 (Hold) Rank.
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