Ad firm WPP's profits surge 15%

UK advertising giant WPP has posted larger-than-expected annual profits and predicted that it will outperform the market in 2005.

Pre-tax profits rose 15% from a year ago to reach £546m ($1.04bn), ahead of average analysts' forecasts of £532m. Revenues were £4.3bn while the firm's operating margins were 14.1%, which it said could reach 14.8% by 2006. During the year WPP bought US rival Grey Global, creating a giant big enough to rival sector leader Omnicom.

Chief Executive Martin Sorrell on Friday told Reuters news agency that WPP had submitted a proposal for United Business Media's NOP World market research unit. Analysts say the unit sell could sell for up to £350m. WPP in recent years has also bought firms such as Ogilvy & Mather and Cordiant Communications. It also includes the firms Young & Rubicam and J Walter Thompson. Events such as the Olympics helped boost WPP's profits in 2004. The company said the US Congressional elections and the FIFA World Cup are likely to present advertising opportunities in the near future. The long-term outlook looks "very favourable" because of media and technology developments and the strength of the US economy, WPP said.