WPP H1 Profit Up; Reaffirms Long-term Targets

(RTTNews) - UK-based advertising giant WPP Plc (WPP.L, WPPGY) Tuesday reported higher first-half profit, as revenues rose about 3 percent from last year. On a constant currency basis, revenue was up 11.3 percent, with significant growth in the U.K and North America. The firm also announced a 10 percent increase in interim dividend, and reaffirmed its long-term targets.

For the first half, WPP's profit before tax grew 15.0 percent to 491.1 million pounds from 427.1 million pounds in the prior year. Pre-tax profit was up 33.7 percent at constant currency.

Headline pre-tax profit improved to 532 million pounds from 524 million pounds last year, and climbed 15.6 percent at constant currency.

Profits attributable to equity holders rose 29.9 percent to 364.8 million pounds from 280.9 million pounds a year ago. At constant currency, profits attributable to share owners were up 53.3 percent.

On a reported basis, earnings per share increased to 27.0 pence from 21.5 pence per share in the previous year. Headline earnings per share were 29.2 pence, compared with 28.4 pence reported last year.

Revenues for the half year increased 2.7 percent to 5.47 billion pounds from 5.33 billion pounds in the preceding year. Billings decreased 3.0 percent to 22.06 billion pounds, while it grew 5.7 percent at constant currency.

On a constant currency basis, revenue was up 11.3 percent year-on-year, the difference to the reportable number reflecting the continuing strength of the pound sterling against the US dollar, Euro and many currencies in the faster growth markets, the company said.

On a like-for-like basis, excluding impact of acquisitions and currency, revenues advanced 8.7 percent in the first half, with net sales rising 4.1 percent.

On a reported basis, revenues increased 2.1 percent in North America, and it climbed 17.2 percent in the U.K. Meanwhile, revenues edged down 1.1 percent in Western Continental Europe, which was challenged by a macro-economic environment.

For full-year 2014, the company expects like-for-like net sales growth of over 3.0 percent, and targets operating margin to net sales improvement of 0.3 margin points on a constant currency basis in line with annual margin target.

WPP also reaffirmed its long-term targets and said it still sees annual headline earnings per share growth of 10 to 15 percent per annum, which will be delivered through revenue growth, margin expansion, acquisitions and share buy-backs.

The board has declared an interim dividend of 11.62 pence per share, up 10 percent from last year, with a pay-out ratio of 40 percent, compared to 37 percent last year. Following a review, the board has decided to target a further increase in the pay-out ratio to 45 percent over the next two years.

The interim dividend is payable on November 10, to shareholders of record on October 10.

Separately, WPP announced that its operating company, GroupM, WPP's global media investment management arm, has agreed to acquire Keyade, a digital search marketing agency in France. Founded in 2006, the agency specializes in performance-driven online media purchasing, and its clients include La Redoute, Air France and Interflora.

In addition, WPP's unit Millward Brown has acquired InsightExpress, Inc., a provider of media analytics and marketing accountability solutions in the U.S. InsightExpress would be combined with Millward Brown Digital, the company's US-based digital unit.

WPP.L is currently trading at 1,247.00 pence, up 20.00 pence or 1.63 percent.