Global expansion and new business boost WPP revenues

LONDON – WPP Group has posted a revenue increase of almost 5% in the first quarter, as it won new business and expanded globally, despite a weakness in the UK market.

The Sir Martin Sorrell-led group's revenues rose 23% over the past 18 months, driven by organic growth.

WPP said it was on track to meet its full-year operating margin target of 14.5%.

Strong growth was reported across all regions with the exception of the UK, where ad revenues have come under pressure from lack of consumer confidence.

Speaking on the publication of the IPA Bellwether Report earlier this week, Sorrell, WPP Group chief executive, said that report confirmed WPP's experience in its home market

"The UK remains one of the weakest geographical markets at the moment.

"But new media and new technologies are growing rapidly as clients experiment with different approaches and question the value of traditional media."

In the first quarter of 2006, the group made acquisitions or increased equity interests in advertising and media around the world including the US, where it bought Bridge Worldwide, and in China, where it bought promotional marketing company Always.

Its US business continues to grow, with like-for like revenues up almost 4%, while Asia Pacific, Latin America, Africa and the Middle East are the fast-growing regions, up over 26%.

Sorrell said: "Asia Pacific remains strong, with India and China continuing the rapid growth seen in 2005, with first quarter like-for-like revenues up sharply again.

"Western Continental Europe, although still relatively more difficult, has seen some improvement, particularly in Germany."

WPP aims to continue its combination of capital expenditure, acquisitions and share repurchases, while ensuring that these expenditures are covered by free cash flow.

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