WPP FY14 Profit Climbs, Lifts Dividend; Jan. Sales Up; Sees Growth Ahead

(RTTNews) - UK-based advertising giant WPP Plc. (WPP.L, WPPGY) reported Monday higher profit in its fiscal 2014 with strong like-for-like revenue growth in all regions and sectors. The company also announced higher dividend.

Looking ahead, the company reported good start to 2015 with January like-for-like revenue up 6.7 percent and net sales up 3.9 percent, stronger than the final quarter of 2014 and 2014 itself.

For fiscal 2015, the company expects like-for-like revenue and net sales growth of over 3 percent and headline operating margin target improvement for both of 0.3 margin points, excluding the impact of currency. Over the long term, the company projects headline earning per share growth of 10 to 15 percent per annum from revenue growth, margin expansion and acquisitions.

For fiscal 2014, WPP's pre-tax profit grew 12 percent to 1.452 billion pounds from 1.296 billion pounds last year. Profit attributable to share owners rose 15 percent to 1.077 billion pounds. Earnings per share were up 15.7 percent to 80.5 pence.

Headline profit before tax, which excluded certain items, was 1.513 billion, up 3.7 percent from last year. Headline earnings per share of 84.9 pence grew 5.1 percent.

Headline EBITDA, a key earnings metric, edged up 0.7 percent to 1.91 billion pounds. Operating margins, before all incentives and income from associates, were 19.1 percent, up 0.1 margin points from last year.

Revenue for 2014 increased 4.6 percent to 11.529 billion pounds from 11.019 billion pounds in the previous year. Revenues grew 9.9 percent in dollar terms to $18.956 billion and 10.4 percent in euro terms to 14.323 billion euros. The company said the increase is despite a six to seven percent currency headwinds. On a constant currency basis, revenue increased 11.3 percent.

WPP noted that revenue is more weighted to the second half of the year across all regions and sectors, and, particularly, in the faster growing markets of Asia Pacific and Latin America.

Net sales for the year edged down 0.1 percent to 10.07 billion pounds. At constant rates, net sales grew 6.3 percent. Net sales margin was up 0.2 margin points to 16.7 percent.

On a like-for-like basis, which excludes the impact of currency and acquisitions, revenue was up 8.2 percent, with net sales up 3.3 percent.

In the fourth quarter, like-for-like revenue was up 7.8 percent, due to stronger growth in North America, the United Kingdom and Western Continental Europe. These were offset by lower growth in Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe.

The company's billings of 46.186 billion pounds for the year remained flat on a reported basis and grew 6.8 percent in constant currency, driven by a strong leadership position in net new business league tables, the company said.

Further, WPP announced a final ordinary dividend of 26.58 pence, a growth of 12.4 percent, giving total full year dividends of 38.20 pence per share, up 11.7 percent.

The company said its targeted dividend pay-out ratio of 45 percent was achieved in 2014, one year ahead of original schedule.

In London, WPP shares were losing 0.71 percent to trade at 1,530pence.