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WPP GROUP 1992 REPORTS INTERIM RESULTS

 WPP GROUP 1992 REPORTS INTERIM RESULTS
 -- Revenues up by over 3 percent to $1,076 million(A) (601.1 million


pounds sterling).
 -- Profit before tax and exceptional items at $26 million (14.5 million pounds), in line with estimate in capital restructuring circular (in excess of $25.4 million /14.2 million pounds/) and up 12 percent against 1991 profits of $23.3 million (13 million pounds).
 -- Exceptional charge, as estimated: $22.7 million (12.7 million pounds) (1991: $5.4 million /3 million pounds/ credit), comprising $24.2 million (13.5 million pounds) of the capital restructuring costs and $1.4 million (0.8 million pounds) gain on asset sales.
 -- Loss per share 8.9p (1991: zero); pro-forma EPS, taking into account restructuring and before exceptional items, of 5.1p basic and 2.7p fully diluted.
 -- Loss per ADS $0.32.
 -- No interim dividend recommended.
 -- Net new business of over $850 million (1991: $800 million).
 -- Some early signs of recovery in media advertising, with revenues up 5 percent against corresponding period.
 -- Cross referrals generated over 18 percent of new assignments.
 -- Group services over 300 of the Fortune 500 companies.
 -- Since June 30, 1992:
 -- Capital restructuring approved by shareholders.
 -- Gordon Stevens appointed chairman upon the retirement of David Ogilvy, who stays with the group as president emeritus and consultant.
 -- Brian Brooks to be appointed director of human resources.
 (A) -- All U.S. dollar equivalents have been converted at the average 1992 exchange rate of $1.79 to the pound.
 NEW YORK, Aug. 13 /PRNewswire/ -- The board of WPP Group plc (ADS - NASDAQ: WPPGY) today announced its results for the six months ended June 30, 1992. These results represent an improvement on comparable figures for 1991 and are in line with the profit estimate contained in the circular to shareholders dated July 13, 1992.
 Revenues rose by over 3 percent to $1,076 million (601.1 million pounds) from $1,041 million (581.7 million pounds).
 Profit before tax and exceptional items rose by 12 percent to $26 million (14.5 million pounds) from $23.3 million (13 million pounds) in 1991. Profit before tax and after exceptional items fell to $3.2 million (1.8 million pounds) from $28.6 million (16 million pounds) in 1991. The net exceptional charge of $22.7 million (12.7 million pounds) ($5.4 million /3 million pounds/ credit in 1991) comprises a charge of $24.2 million (13.5 million pounds) in relation to the costs of the capital restructuring not previously provided and a gain on asset sales do $1.4 million (0.8 million pounds).
 The basic loss per share was 8.9p as compared to zero in 1991. On a pro-forma basis, taking into account the impact of the capital restructuring, the basic and fully diluted earnings per share would have been 5.1p and 2.7p, respectively. (This has been calculated after adding back the exceptional items and assumes the interest saving on the capital restructuring, a 2 percent dividend on the CCRP shares, and no takeup under the open offer.)
 The board does not recommend an interim ordinary dividend.
 The group tax rate on profits before exceptional items rose to 47 percent from 40 percent in the previous year due to a change in the geographical incidence of profits in the half year.
 Group revenues rose by 2.7 percent in constant currencies and operating costs by 3 percent. As a result the group operating margin declined to 5.8 percent from 6 percent.
 The average number of staff employed by the group was 20,631 in the first half of the year, compared to 21,686 in the first half of 1991, a decline of 5 percent.
 Net interest paid fell from $39.6 million (22.1 million pounds) to $36.7 million (20.5 million pounds), as declining interest rates more than offset the increase in net debt in the first half. As a result, pretax margins, prior to exceptional items, increased slightly to 2.4 percent from 2.2 percent in 1991.
 Review of Operations
 The 2.7 percent increase in revenues in constant currencies was achieved despite no significant upturn in the level of economic activity, particularly in the group's key markets in the United States and the United Kingdom, which account for some two-thirds of revenue.
 Revenues declined by 2 percent in the United States and increased by 5 percent in the United Kingdom.
 However, the group's operations outside the United States and the United Kingdom continue to perform relatively better, particularly in parts do Continental Europe, Southeast Asia, Japan and Latin America. This has occurred despite an economic slowdown in some of these markets.
 Revenues increased by 6 percent in Continental Europe and by 8 percent in the rest of the world.
 There have been some early signs of recovery in media advertising, while continuing strength is shown by the group's market research, specialist communications and strategic marketing services activities. There have been no signs of recovery in public relations or non-media advertising.
 Net new business billings of more than $850 million (475 million pounds) were won in the first half of the year, compared to $800 million (440 million pounds) in the first half of 1991. J Walter Thompson Company generated net new business billings of over $250 million (140 million pounds). Ogilvy & Mather Worldwide generated net new business billings of $188 million (105 million pounds).
 Revenues
 Revenues in media advertising increased by 5 percent in the first half of 1992.
 Revenues at J Walter Thompson Company rose by 9 percent and at Ogilvy & Mather Worldwide (including Cole & Weber and Ogilvy Direct), revenues rose by 2 percent.
 Scali, McCabe, Sloves Inc.'s revenues declined, while Conquest Europe, which has recently won major new assignments from an existing client, saw revenues rise significantly.
 Public Relations
 The group's public relations activities remain severely affected by the recession, particularly in the United States, and revenues declined by 12 percent.
 Market Research
 The group's market research businesses continue their strong performance, with revenues increasing by 10 percent.
 Strategic Marketing Services
 Non-Media Advertising and Specialist Communications
 The group's operations in strategic marketing services, audio-visual services, healthcare marketing and direct marketing continue to perform well in 1992.
 Certain of the group's design companies, principally those operating in corporate identity, packaging design in the U.K. and interior design, performed reasonably well in difficult conditions. However, the recession continues to have a particularly significant impact on the group's retail design operations in the United Kingdom and United States.
 The group's ales promotion activities have performed satisfactorily, although the U.K. market remains difficult.
 Capital Restructuring
 The implementation of the capital restructuring, which was approved by shareholders on Aug. 5, 1992, will strengthen the group's balance sheet and improve liquidity.
 The group continues to examine ways of reducing debt through asset sales, flotations and other means.
 In particular, discussions with interested parties continue concerning the disposal of Scali, McCabe, Sloves and the flotation of the group's market research activities and its operations in Southeast Asia. However, given market conditions it will be difficult to achieve all of these in the short term.
 Average net debt in the first half of the year was $851.8 million (476 million pounds), an increase of $34 million (19 million pounds) in constant currencies compared to the corresponding period in 1991, principally reflecting cash earnout payments.
 Future earnout payments are estimated to total $104 million (58 million pounds) in the period July 1, 1992, to the end of 1995, of which an estimated $57 million (32 million pounds) are payable in cash. This compares with a total of $125 million (70 million pounds) at the end of 1991.
 Cross-Referrals in the First Half of 1992
 At the end of the half year, the group worked with over 900 major national or multinational clients in two or more of its divisions, as against 868 at the end of the last year, with more than 350 clients in three or more services as compared with 330, and with 162 clients in five or more countries as against 155. The group now serves more than 300 of the Fortune 500, and employs 20,656 people in 625 offices in 64 countries.
 The group estimates that more than 18 percent of new assignments in the first half of the year were generated by group cross-referrals.
 Management
 On Aug. 6, 1992, David Ogilvy retired as chairman and director has been succeeded by Gordon Stevens. Stevens previously had a distinguished marketing and management career with Unilever, where he was a main board director for 12 years.
 In recognition of his invaluable services to the group, the board has invited Ogilvy to stay on as president emeritus and consultant, and he has accepted. In this role, Ogilvy, age 81, will continue to make his unique contribution to the group, particularly Ogilvy & Mather Worldwide, the company he founded.
 Brian Brooks will be appointed to the board as a director and senior vice president for human resources. He was previously a partner at Towers Perrin. He will be responsible for devising and managing reward systems and career development plans with the managements of group companies, to ensure that its single most important asset -- its people -- are properly motivated and rewarded.
 At the same time, John Symonds will retire as a director. Symonds has been a director of the company for over 10 years, the first seven as chairman. The board appreciates his invaluable advice and counsel.
 Future Prospects
 Despite there having been no significant upturn in the level of economic activity, and a continuing concern about the economic environment, the board has been encouraged by the group's trading in recent months.
 The board believes that the performance of the operating companies can be significantly improved. It is the board's objective that operating margins will be improved to acceptable historic and competitive levels.
 The board is working with management of the operating companies to improve the ratio of staff costs to revenue. In addition, major efforts continue to be made to reduce excess property costs wherever possible, either by sub-letting space or by moving operating subsidiaries on the expiry of sub-leases into surplus group property.
 These actions, together with the reduction in interest costs following the capital restructuring, are expected to improve significantly the group's cash flow.
 The performance of the companies within the group, during difficult economic conditions and a period of intense speculation over the group's future, is a testimony to the strength of these companies, their management and staff, and their client relationships.
 Following shareholders' approval of the capital restructuring the board believes that the group is significantly better placed to capitalize on these strengths and to take advantage of any upturn in business when it occurs.
 WPP GROUP PLC
 Unaudited Consolidated Interim Results
 Six months to June 30 1992 1991 Incr./(Decr.)
 (Pounds in thousands) Percent
 Turnover 2,501,178 2,354,410 6
 Revenue 601,056 581,656 3
 Profit before exceptional items 14,544 12,985 12
 Exceptional items (12,720) 3,010 --
 Profit on ordinary
 activities before taxation 1,824 15,995 (89)
 Tax on profit on
 ordinary activities(A) (6,836) (6,398) 7
 (Loss)/profit on ordinary
 activities after taxation (5,012) 9,597 --
 Minority interests (112) (760) (85)
 (Loss)/profit for the period (5,124) 8,837 --
 Preference dividends(B) -- (8,825) --
 (Loss)/profit attributable
 to ordinary shareholders (5,124) 12 --
 Ordinary dividends(C) -- -- --
 Retained (loss)/profit
 for the period (5,124) 12 --
 Loss per share(D) (8.9p) -- --
 Loss per ADS ($0.32) -- --
 (A) -- The tax charge for the six months to June 30, 1992, is based on the estimated tax rate for the full year applied to profit before exceptional items. The exceptional items have no significant tax effect.
 (B) -- A provision was made at June 30, 1991, for future payments of the cumulative dividend payable on the preference shares to the extent that previous dividend payments had not been made at that date due to the insufficiency of distributable reserves. Following the approval of the capital restructuring proposals by shareholders on Aug. 5, 1992, no payment of these dividends will be made in the future and therefore no similar accrual has been made in the period to June 30, 1992.
 (C) -- The directors are recommending that no interim dividend be paid on the ordinary shares in respect of 1992 (1991: zero).
 (D) -- The loss per share has been calculated on the weighted average shares in issue during the relevant periods, being 57,831,382 shares in 1992 and 43,959,831 shares in 1991.
 NOTES:
 -- These results incorporate an average exchange rate of $1.79 to the pound for the six months to June 30, 1992, as compared with $1.81 to the pound for the six months to June 30, 1991.
 -- The interim statement will be sent to all shareholders and will be available at the registered office of the company.
 -- The figures for earnings per American Depositary Share (ADS) have been calculated on the basis of two ordinary shares to each ADS.
 -0- 8/13/92
 /CONTACT: Martin Sorrell, Robert Lerwill, Feona McEwan, or Mark Read of WPP Group, 011-44-71-408-2204/
 (WPPGY) CO: WPP Group ST: IN: ADV SU: ERN


CK-LS -- NY016 -- 9574 08/13/92 11:19 EDT
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Date:Aug 13, 1992
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