WPP numbers better than feared

5th Mar 2010 07:05

WPP has been hit hard by the recession and slump in advertising spend, but headline profit before tax fell less than expected during a "brutal" 2009 and there was an encouraging return to stability in January.Headline profit before tax for the 12 months to 31 December fell 16%, or 24% at constant currency, to £812.2m, although analysts had expected something nearer £780m.The numbers, the first to include a full-year from Taylor Nelson Sofres, showed revenue nearer forecasts at £8.68bn, up 16%, or 5% at constant currency. Headline profit margin dropped to 11.7% from15% in 2008.The group also hopes 2010 should be a more stable year, with several mini-quadrennial events such as the Winter Olympic Games, Asian Games, FIFA World Cup in South Africa, World Expo in Shanghai and mid-term Congressional elections in the United States."On the basis of past experience, add approximately 1 percentage point to industry growth rates," said the group.There was a marked improvement in the second half of the year when headline operating profit rose to £675m, up from £342m in the first half and £665m during the last six months of 2008.Like-for-like revenues, excluding the impact of acquisitions and on a constant currency basis, were down 8.1%, reflecting "less worse" trends in the second half and final quarter of the year.Billings rose 2.7% in 2009 to £37.9bn and net new billings to £3.1bn, and the group has seen "very strong" net billings inflow in first two months of 2010 of almost $2bn.But they were almost the same in January and WPP's budgets indicate flat like-for-like revenue growth in 2010, with a mildly weaker first half and stronger second-half. "The second quarter shows like-for-like top line growth - a budgeted return to growth for the first time in six quarters, although the second quarter of 2009 is the weakest comparator," it says.There's a second interim dividend of 10.28p a share, making a total for the year of 15.47p, thesame as 2008.