WPP Group, parent company of design consultancies including Enterprise IG, BDG McColl and Coley Porter Bell, has announced record profits for the year to 31 December 1998. But the group is aiming to further improve operating margins to match competitors such as the Interpublic Group of Companies and Omnicom Group.
Last year WPP’s turnover exceeded 8bn for the first time, an increase of nearly 10 per cent since 1997. Gross profits rose by 11.32 per cent to 1.632bn, on the back of operating margins which increased by a full percentage point to 12.8 per cent. Operating profit was 229.1m, a 17.5 per cent increase. Shareholders will benefit from increased dividends, which have risen 20 per cent to 2.56p per share.
The group still lags behind multinational rivals when it comes to its margins. “There is still a significant profit opportunity in matching the operating margins of the best-performing competition… The Interpublic Group and Omnicom Group achieve 15 per cent to 16 per cent operating margins,” says WPP’s results statement.
Growth at the group continued throughout the year. At year end it employed more than 33 000 full-time staff in 92 countries. WPP-owned groups were responsible for serving over 300 companies on the Fortune Global 500 list.