Advertising revenue has been diminishing frighteningly over the past six to 12 months and those who rely on it, including many companies that make up part of the mammoth WPP Group, will have been feeling the pressure.
In a downturn, advertising, publicity, marketing – indeed anything that goes under the banner of corporate communications – feels the pinch first.
So when WPP group finance director Paul Richardson prepares the company’s interims for publication on 20 August, he’ll be looking to see just how much the downturn has begun to drive down revenues.
Under the umbrella of WPP, work has been carried for some of the biggest brands. These include the Land Rover Freelander ads shot in Africa, projects for Coca Cola and branding for the Winter Olympics this year at Salt Lake City. A FTSE-100 company, the group’s reach and breadth of service is phenomenal handling everything from branding, advertising, marketing, public relations and anything else that involves a client saying something to the outside world. But with that comes huge complexity. Richardson’s job as group FD will involve the tricky and delicate task of bringing together the results for around 140 companies.
Consolidating that volume of information from companies all over the world has more than its fair share of logistical problems all of which will have to be overcome if Richardson is to present an accurate picture of what is happening in this vast organisation.
This year he will be dealing with another raft of acquisitions as member companies continued a spending spree around the world. Having said all that Richardson will have also seen the results of a #400m bond issue intended to be used to refinance existing bank facilities incurred for acquisition of Tempus Group and for other more general purposes.
Richardson’s interims should also give some indication of whether the company is going to beat last year’s figures. In 2001 turnover was up massively from £13.9bn to a whopping £20.8bn. Given the way the group gobbles up new companies this growth must have been fuelled by acquisitions on top of organic growth.
A letter to shareholders in the 2001 report said it had been a ‘brutal’ year because of September 11. Turnover was up nearly 50% but the share price fell 12%. Richardson will no doubt have noticed the share price still does not look and could do with a shot in the arm. In March it peaked at 820p but has since fallen dramatically and was trading last week at around 433p.
This will not be good news but then few companies in the FTSE-100, or any other index for that matter, have had good stories to tell about their share price in recent months.
Harrison Beale & Owen will (HB&O) have a new chairman and managing director at the helm for 2017
Satvir Bungar promoted to managing director in the mergers and acquisitions team
Carolyn Brown appointed as the first head of client legal services practice RSM Legal
UK senior partner Phil Verity has been elected for a second term at Mazars