Tough conditions drag WPP profits down 47%

26th Aug 2009 07:03

Advertising giant WPP said half-year results continue to reflect the impact of the global economic contraction, which continued to intensify in the second quarter, though results for July did indicate a 'less-worse' picture.Pre-tax profit for the six months fell 47% to £179.3m, reflecting the impact of higher sterling translation of interest costs on Euro-denominated debt.Reportable revenue rose 28.4% at £4.289bn but on a like-for-like basis, which excludes the impact of acquisitions and currency, revenues were down 8.3% in the first half.But the group said the second-half is forecast to show a marked improvement in profitability, both absolutely and in terms of maintaining second half margins at prior years levels.Geographically, the impact of the recession was felt most in US and Western Continental Europe in the first six months. Only Latin America and Africa remained relatively unscathed, the only region or continent showing like-for-like growth in the first-half. "April, May and June showed progressive deterioration in like-for-like growth, although July showed some sequential improvement," said the group.As at 30 June 2009, the number of people in the Group fell by over 5,800 or 5.2% compared to the pro-forma figure at 31 December 2008. As at 31 July 2009, the number had fallen further to 105,393 or 6.3%.The group said its like-for-like headcount is now better balanced in comparison to the reduction in like-for-like revenues."Although it is still very early to budget or forecast what may happen in 2010, top line revenues will probably be 'even Steven', despite the positive impact of the Winter Olympics in Vancouver, the World Expo in Shanghai, the Asian Games in Guangzhou, the FIFA World Cup in South Africa and the mid-term Congressional elections in the United States," added WPP.Interim dividend was left flat at 5.19p per share.