Ad giant WPP sees profits surge

WPP is led by Sir Martin Sorrell

The world's second-largest advertising company, WPP Group, has reported a 36% rise in pre-tax profits.

Annual pre-tax profits rose to £669m ($1.2bn), following the company's acquisition of Grey Global.

WPP, parent of advertising agencies Young & Rubicam and JWT, said revenues rose 25% to £5.4bn, with like-for-like revenues up 5.5%.

The firm has clients such as HSBC and Ford, but last year lost the accounts of Coca-Cola and Samsung.

But forthcoming events this year should boost advertising revenues.

"Usually the winter Olympics and the World Cup plus the US midterm elections add about 1% to global advertising spending," said chief executive Sir Martin Sorrell.

Interactive future?

WPP is currently at the centre of a high-profile battle with Marco Benatti, its former country manager in Italy, who left the company in January.

We're looking at internet, direct and interactive, and in the faster-growing markets Sir Martin Sorrell, chief executive See WPP's share price

The London-based group is investigating its Italian operations but said the probe is not expected to have a significant impact on its profits.

Mr Benatti has denied any wrongdoing and said his departure from the ad giant was due to a disagreement with another WPP manager in Italy.

Late last year, WPP dropped its plans to take over UK rival Aegis and now looks likely to concentrate on making smaller acquisitions.

"We're looking at internet, direct and interactive, and in the faster-growing markets," Sir Martin said.

Direct, internet and interactive related activities now account for more than 15% of the group's revenues, WPP said.