Member Article

WPP return their headquarters to the UK

International advertising group WPP reported improved profits of £358m before tax, up by 7% in its first-half results.

The firm also announced its plans to move its headquarters back to the UK ,after coalition legislative changes that mean there would be no tax cost in the move. Individual tax-paying shareholders will be most affected by this move because the scrip dividend alternative will be lost.

Headline pre-tax profits increased 11.9% to £467m and revenues rose by 5.5% to nearly £5bn.

Like-for-like revenue also rose 3.6% and interim dividends per share stood at 8.8 pence up by 8.8%.

The FTSE 100 company said that budgets were tight for next year, giving rise to shareholders’ concerns after clients in North America reduced spending and U.S and Western European markets slowed.

The organization’s media investment management businesses showed growth however, and Latin America, Asia Pacific, Africa, the Middle East, and Central and Eastern Europe showed the most strenght with increased constant currency revenues of 11.1% in the second quarter.

WPP’s warnings of depressed levels pushed shares down on Thursday morning to 4.5 pence per share.

WPP stated: “The pattern of 2012 looks very similar to 2010 and 2011, albeit at lower overall like-for-like growth rates – in effect, the same but less.

“Forecasts of worldwide real GDP growth still hover around 2.5-3.5%, with inflation of 2% giving nominal GDP growth of 4.5-5.5%.

“Advertising as a proportion of GDP should at least remain constant, although it is still at relatively depressed historical levels,
particularly in mature markets.”

This was posted in Bdaily's Members' News section by Miranda Dobson .