WPP AUNZ reports headline profit growth in first full results following STW merger

Marketing content and communications group WPP AUNZ has reported a headline profit before interest and tax of $141.6m in its first full-year earnings results presented under the name WPP AUNZ after the completion of the STW-WPP merger in April last year.

The group – with agencies including Ogilvy, DT, Grey, GroupM, VML and Designworks – saw its headline profit grow by 3.5% year-on-year, from $136.9m to $141.6m. Profit after tax was up 5.7% year-on-year from $82m to $86.7m.

WPP AUNZ broke down its results by segment with public relations and public affairs – which houses the likes of Ogilvy PR, PPR and CanningsPurple – posting the largest growth in profit before interest and tax (PBIT) with a year-on-year growth of 44.8% from $6.4m to $9.3m.

Data investment and management posted a headline PBIT of $25.3m, branding & identity and specialist communications reported a PBIT of $31.7m, and advertising, media investment management had the largest overall PBIT of $75.3m.

Michael Connaghan, chief executive of WPP AUNZ, told an investment briefing: “It’s clear from this breakdown overall our business segments as a portfolio have been performing well.

Mike Connaghan

“The advertising and media segment remains a significant part of the business. The business was strengthened by the inclusion of GroupM as a result of the merger. Some of the issues confronting GroupM and Mediacom in particular are well documented but it was very pleasing to see Mediacom as one of the agencies retaining and winning significant client mandates in quarter four of 2016,” said Connaghan.

“In advertising, Ogilvy had a very strong year both in Australia and New Zealand. Ogilvy is and has always been a key business for us and we need them firing.

“We see plenty of upside in the other global ad agency brands. Margin improvement across the board will be a sharp focus for us this year.”

In a statement to the ASX, Connaghan said:  “We are pleased with the progress that has been achieved during 2016 across our combined group. Our business model continues to deliver organic growth as well as future expansion opportunities through the global WPP Group. In particular, the merger provides exciting pathways for our talented people and generates market-leading services for our clients.

“While we remain cautious on the outlook, given a flat media market, restrained client spend and a subdued macro-economic environment, we saw significant momentum in new client wins in the final months of the year. At this stage, we expect to deliver mid-single digit growth in earnings per share for the full year 2017.”


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