WPP beats forecasts after strong US performance

A rebound in the United States advertising market allowed WPP, the world's largest ad group, to follow its peers and post strong full-year results on Friday and a solid outlook for 2011.

WPP, whose ad agencies include JWT and Ogilvy & Mather, posted fourth quarter organic revenue growth of 8.5 per cent and said the solid performance had continued into January with revenue up over 8 percent.

The strong finish to the year, which had been expected after rivals Omnicom and Publicis posted better than expected results, helped WPP to post a full-year figure of 5.3 per cent, with both the fourth quarter and full-year figures ahead of forecasts.

For 2011 it expects the key industry metric of like-for-like growth, which strips out the impact of acquisitions and currency moves, of five per cent and operating margins to rise 0.5 margin points to 13.7 per cent.

Analysts had expected Martin Sorrell's firm to report quarter four growth of 7.3 per cent and full-year growth of 4.9 per cent although expectations had risen after US group Omnicom and France's Publicis reported strong trading.

A solid update by another peer Interpublic and reports from media groups that ad markets were growing strongly has added to the sense in recent weeks that the industry is well into a recovery from one of the toughest downturns in recent history.

WPP's performance was boosted by the rebound in the US, continued growth in China, its strong presence in the digital market and an overall drive by fast moving consumer goods companies to increase their marketing spend.

For 2011 it expects organic revenue growth of around five per cent, in line with forecasts.

Overall reported revenue was up 7.4 per cent to £9.3bn, compared with an analyst forecast of £9.2bn. It also said it would target a divided pay-out ratio of around 40 per cent over the medium term from around 30 per cent