Growth in direct, digital and interactive business has played a major role in Sir Martin Sorrell’s WPP sealing an 18% year-on-year increase in annual pre-tax profits, which saw it break through the £1bn-mark for the first time.
The group, which also cited a strong performance in Asia Pacific and Latin America – both burgeoning DM and data regions – hailed 2011 as “a record year on virtually whatever measure you care to name . . . achieved in difficult circumstances, particularly in the second half”.
The group’s global direct, digital and interactive agencies – including OgilvyOne, Wunderman and G2 – showed continuing strong growth, with like-for-like revenues up well over 7% for the year. This sector showed strong margin improvement, with reported operating margins up 1.9 margin points to 14.3%.
Significantly, at a time when many agencies are being forced to slash charges, WPP’s overall gross margins increased 1.1 points to 15.5%. It also boosted headcount by about 10,000 to 110,000 last year, not including associate businesses and freelances, in preparation for further expansion in 2012.
In addition, WPP continued its acquisition strategy, snapping up about 30 companies or divisions in 2011, with another ten deals announced so far in 2012.
