WPP beats expectations, Latin America driving growth

The FTSE 100 advertising giant WPP has reported champion revenues and profits as the company gears up for Olympic year.

The so called "maxi-quadrennial" events of the London Olympics, the Euro 2012 football championships and the US Presidential election are whetting the appetite of WPP's high profile boss Martin Sorrel but 2011 does not appear to have been a bad year by any means.

Revenues at the Dublin head-quartered company came in at £10bn, ahead of analysts' predictions of £9.9bn.

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Profits before tax came in at £1.4bn, against a market consensus of £1.1bn, and 17% ahead of 2010 on a constant currency basis.

Earnings per share were 67.7p against a market expectation of 64.8p, and 20% ahead of 2010.

The company saw growth in all its regions with Latin America the biggest gainer, posting like-for-like revenues up by 18%.

In its outlook statement WPP says 2012 may be similar to 2011, with companies willing to invest in their brand to grow market share.

Advertising usually grows in line with gross domestic product (GDP) and worldwide GDP growth for 2012 is forecast to come in at between 2 and 3 per cent, while the maxi-quadrennials are expected to boost industry growth by 1%. The company is targeting like-for-like revenue growth of 4% and operating margin improvement of 0.5%.

The firm's shares have dropped 3.4% over the last 12 months.

BS