WPP FY15 Profit Rises, Lifts Dividend, Sees Higher Sales, Margin In FY16

(RTTNews) - Advertising giant WPP Group Plc. (WPP.L, WPPGY) reported Friday higher profit in its fiscal 2015, driven by strong like-for-like revenue growth in all regions, led by North America, and in all sectors, except data investment management. The company further announced double-digit growth in annual dividend, and said it sees higher sales and margin ahead.

Regarding the current trading, the company said its like-for-like revenue increased 4.2 percent for the month of January, with like-for-like net sales increased 2.3 percent, both ahead of budget.

For fiscal 2015, profit before tax rose 2.8 percent to 1.493 billion pounds from 1.452 billion pounds last year. Profits attributable to share owners grew 7.7 percent to 1.160 billion pounds. Earnings per ordinary share grew 9.8 percent to 88.4 pence.

Headline profit before tax, which excluded certain items, was 1.622 billion pounds, compared to 1.513 billion pounds last year. Headline earnings per share were 93.6 pence, compared to 84.9 pence a year ago.

Headline profit before interest and tax grew 5.6 percent to 1.77 billion pounds, and headline EBITDA, a key earnings metric, increased 4.9 percent to 2 billion pounds.

Revenue for the year was up 6.1 percent to 12.235 billion pounds, despite 1.4 percent negative impact from currency. Revenue on a constant currency basis was up 7.5 percent. In US dollar terms, revenue was down 1.4 percent to $18.693 billion. Like-for-like revenue growth was 5.3 percent.

Annual net sales grew 4.6 percent on a reported basis and 5.8 percent in constant currencies to 10.52 billion pounds. Like-for-like net sales growth was 3.3 percent.

Net sales margin, a more accurate competitive comparator, went up 0.2 margin points to an industry leading 16.9 percent.

Billings were 47.632 billion pounds, a growth of 3.1 percent on a reported basis and 4.9 percent at constant currency from the prior year.

In the fourth quarter, like-for-like revenue was up 6.7 percent, the strongest quarter of the year, reflecting stronger growth in North America, the United Kingdom and Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe. Like-for-like net sales were up 4.9 percent with all regions, except the United Kingdom and Western Continental Europe, recording their strongest quarter of the year.

Further, the Board declared an increase of 8.3 percent in the final dividend to 28.78p per share. This makes a total dividend of 44.69p per share for 2015, an overall increase of 17 percent. This represents a dividend pay-out ratio of 47.7 percent, compared to a pay-out ratio of 45.0 percent in 2014.

The company added that it now seems possible that the newly targeted pay-out ratio of 50 percent will be achieved by the end of 2016, one year ahead of target.

The company expects 2016 Like-for-like revenue growth of well over 3 percent and net sales growth of over 3 percent. WPP also targets operating margin to net sales improvement of 0.3 margin points excluding the impact of currency.

Over the long-term, the company expects headline earnings per share growth of 10 percent to 15 percent per annum from revenue growth, margin expansion, strategically targeted small- and medium-sized acquisitions and share buy-backs. The company also projects operating margin expansion of 0.3 margin points or more on a constant currency basis.

In London, WPP shares were trading at 1,517 pence, down 1.43 percent.