WPP confident of strong year

Advertising giant WPP today said it expected to capture market share this year as economic conditions continue to improve around the world.

WPP said it expected like-for-like revenues to grow by 3% to 4% this year, against a worldwide hike in spending on advertising and marketing of 2% to 3%.

It also raised the bar on profitability hopes in 2005 with operating margins now expected to be higher than predictions made at the time of its £730m (€1bn) acquisition of New York-based agency Grey Global in September.

The upbeat outlook sent shares 2% higher and added to the glow from a record performance last year, including an increase in pre-tax profits of more than 15% to £546.5m (€791.2m).

New billings since the start of January have been very strong with net wins of more than $600m (€454.5m / £313.9m) according to trade publications, WPP said.

Although the outlook for the world economy was positive, WPP said a worry remained over whether budget deficits, the spike in commodity prices and the weak US dollar might destabilise the US economy.

In the UK, prospects have been lifted by the imminent general election.

Companies in the technology, financial services, media and telecoms sectors were also spending more money on advertising and marketing after tightening their budgets in recent years to weather the economic downturn.

WPP is one of the world’s biggest advertising and public relations firms, with more than 55,000 staff and 1,400 offices.

Agencies include J Walter Thompson, Ogilvy & Mather Worldwide and Young & Rubicam, while it has the Hill & Knowlton PR business in the UK.