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WPP H1 Profit Climbs, Lifts Dividend; Revises Down FY Outlook - Quick Facts

Advertising giant WPP Group Plc. (WPP.L,WPPGY) reported Wednesday that its first-half profit before tax climbed 83.3 percent to 779 million pounds from last year's 425 million pounds.

The latest results were benefited by gains on the fair value of financial instruments, while last year was hurt by net exceptional costs.

Profit after tax of 634 million pounds climbed 124.7%, and earnings per share grew 146.6 percent to 46.6 pence.

Headline profit before tax was 793 million pounds, up 15%. Headline earnings per share were 45.4 pence, compared to 39.1 pence a year ago.

EBITDA grew 14.2 percent to 1.016 billion pounds.

Revenue went up 13.3% to 7.404 billion pounds from last year's 6.54 billion pounds. In US dollar terms, revenues were down 0.4% to $9.328 billion, while in euros, it grew 2.7% to 8.609 billion euros.

Constant currency revenue was up 1.9%, while like-for-like revenue was down 0.3%.

Net sales increased 13.7 percent to 6.36 billion pounds.

Billings for the first half grew 6.3% to 26.906 billion pounds, but was down 4.7% in constant currency.

Further, the company said it Board declared an interim dividend of 22.7p per share, an increase of 16.1%. The record date is October 6, payable on November 6.

Regarding the current trading, the company said July like-for-like revenue growth of negative 4.1% and net sales growth was negative 2.6% like-for-like. Cumulative like-for-like revenue growth for the first seven months of 2017 is down 0.9% and net sales down 0.8%.

Further, the company said it revised its forecast down further, with both like-for-like revenue and net sales forecast to be between zero and 1.0% growth for fiscal 2017.

The company attributed the revision to the pressure on client spending in the second quarter particularly in the fast moving consumer goods or packaged goods sector.

The company targets operating margin to net sales improvement of 0.3 margin points on a constant currency basis in line with full year margin target.

Separately, WPP said it acquired brand design agency, Design Bridge Limited. Design Bridge's revenues for the year 2016 were approximately £40 million, with gross assets of approximately £28 million.

by RTT Staff Writer

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