WPP AUNZ reports modest revenue growth in half year results

Advertising and public relations company WPP AUNZ has reported a 3.8% half year profit increase from $41.9m to $43.4m.

The holding company’s advertising and media investment management arm – which includes agencies Y&R, WhiteGrey, JWT, Ogilvy and Spinach – saw the most growth for the company, increasing its net sales by 4.7% to $232.8m.

Connaghan said the the company was “a tad disappointed” with the results 

WPP AUNZ’s advertising and media investment management arm made slight headway in headline profit before income and tax (PBIT) with a 1.3% jump to $28.1m.

Despite this, on an investor call Mike Connaghan, CEO at WPP AUNZ, said the results were “fairly robust” but the company is “a tad disappointed” and the was hoping for more significant growth.

However, Connaghan noted the group’s public relations and public affairs divisions “pleasing turnaround from previous periods”.

In February, the holding company saw its PR and public affairs operations take a hit with a 7.2% profit fall.

For its half yearly results its PR and public affairs arm, which includes agencies such as OPR, Cannings Purple, Hill + Knowlton Strategies, PPR and Pulse Communications, saw a 0.4% growth in net sales to $29% and a 1% increase in headline PBIT to $4.6m.

In May, WPP won one of the biggest PR accounts in Australia, Telstra.

The only arm of the holding company to fall in sales and PBIT was branding and identity and specialist communications, which dropped 0.3% to $104.4m in net sales and earned the company $8.6m in profit before tax.

WPP AUNZ’s branding and specialist communications agencies include Landor, Cornwell, Designworks, WPP AUNZ Consulting and Blaze.

Connaghan said the fall in sales and profit for its branding and specialist communications agencies was due to “pressure from market softness, particularly retail client”.

“Our business continues to deliver headline organic growth. We remain focused on strengthening the foundations and fundamentals of our business, investing in our people and culture, delivering more for our clients and improving returns to shareholders in the long term.

“Over the last six months, we have made a number of investments to support this including investing in a new Melbourne property campus to house 15 brands and 360 people; investing in a state-of-the-art production infrastructure and, taking a greater ownership in minorities and associated entities that will ensure we work more cohesively across the Group.”

The group also increased its net debt, by $55m to $305m to fund increased working capital requirements, tax payments and development of its new Melbourne campus. The increase saw the group’s leverage ratio drift up to 1.9x, up from 1.8x at the end of last financial year.


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