INTERVIEW: WPP CEO Says Organic Revenue Continues To Improve

24th Jun 2010 10:38

CANNES, France (Dow Jones)--WPP PLC (WPP.LN) is running ahead of its budget both in terms of organic revenue and profit margins as advertising markets are improving across regions, Chief Executive Martin Sorrell told Dow Jones Newswires Thursday. Organic revenue growth continued to accelerate in the second quarter, with April revenue up around 4% on year and May revenue up over 5%, Sorrell said in an interview at the Cannes Lions Advertising Festival. Sorrell said that the group's current organic revenue growth target of 2% for 2010 is "probably on the conservative side" and he is confident the group will improve its profit margin by one margin point to 12.7% this year. Still, the executive warned that the improvement in organic growth, a closely-watched measure in the advertising industry that strips out acquisitions, disposals and currency effects, must be seen in the context of weak comparatives. "It is amazing how people congratulate themselves about growth on weak comparatives," he said. Sorrell, who is also the founder of WPP, the world's largest advertising and marketing company by revenue and market cap, also sounded a cautious note with regards to renewed economic and financial trouble, such as European sovereign debt worries. "There are some clouds on the horizon... people are starting to be nervous again," he said, adding however that there are no signs yet that such new fears are impacting WPP's business. The Dublin-based group continues to focus on small and medium-sized acquisitions with significant buying opportunities, especially in markets such as Brazil, Russia, India and China, according to the CEO. "We have a lot in the pipeline," Sorrell said. -By Ruth Bender, Dow Jones Newswires; +331 4017 1740, [email protected] (END) Dow Jones Newswires June 24, 2010 05:38 ET (09:38 GMT)