WPP group expects flat growth in 2010

The head of WPP group, Sir Martin Sorrell has said that he expects a flat growth for the group in 2010.

Sir Martin said that he does not see recessionary trends in big markets, and he forecasts a growth in emerging markets. Sir Martin sees a tough time for company operations in Western Europe in the year.

The group recorded a 21 per cent drop in pre-tax profit to £663m from £747. The revenue was up 5 per cent to £8.7bn. Earning per share for the company fell from 37.6p to 35.3p.

The company announced interim dividend of 10.28p with a 15.47p a share for the year. The operating margin of the company fell from 15 per cent to 11.7 per cent during the year while Sir Martin had estimated at 12.7 per cent in
2010.

The group cut its workforce from 112,930 to 105,318 during 2009 but has not started hiring again. The advertising and media management department saw a fall of 8.5 per cent in revenues. It accounts for 40 per cent of the total turn over.

The recession had affected the operations of the company mainly in Western Europe and in the US where the decline was and 8 per cent respectively. These regions account for nearly 60 per cent of turnover for the company. The UK fell 6 per cent and the rest of the world fell 6.8 per cent.

Analysts said the estimates of Sir Martin were over cautious and thus he is optimistic about the figures this year.

The shares of the group rose 21.5 p to 645½p. The group is valued at £8.1billion at current market prices.