Martin Sorrell, chief executive officer of WPP Group. (Reuters)
Shares in global advertising agency WPP gained more than 4% after the company reported a jump in half-year profits and a robust outlook for the rest of the year.
WPP said its half-year pre-tax profit increased by 19% to £427m ($663m, €496m) off the back of a 7.1% rise in revenues to £5.3bn.
Like-for-like revenue growth, a measure excluding effects of expansion, acquisition or any other event that artificially enlarges a company's revenue, was 2.4%.
Second-quarter like-for-like revenue increased in North America, the UK, Asia Pacific, Latin America, Africa & the Middle East and Central and Eastern Europe and Latin America. It declined in Western Europe, which is suffering from the region's credit crisis.
On the back of strong results, WPP raised its interim dividend by 20% to 10.56 pence.
The company also lifted its like-for-like revenue and gross margin growth forecast to more than 3%, after having experienced a 5% increase in like-for-like revenue for July.
WPP shares were trading at 1,229 pence, up 4.33%, as at 9:40am BST.
Despite challenges in the global economy, WPP said "2014 looks a better prospect" with the World Cup in Brazil, the Winter Olympics in Sochi and US senate elections.
It noted that a "change in media consumption habits is being driven by alternative screen consumption on tablets and smart phones" and by "alternative distribution channels through the internet."
"For the remainder of 2013, our prime focus will be on meeting our margin objectives by balancing revenue growth and operating costs and by increasing our cost flexibility," the company said in a statement.
The company is expected to lose its position as the world's biggest advertising firm if a merger between Paris-based Publicis Groupe and the US's Omnicom Group receives regulatory approval. The merger plan forming an advertising mammoth worth $35bn was announced in July.
WPP chief Martin Sorrell said the deal was "big, bold and surprising", but he criticised the merger, warning that the merged entity will have a "clunky" structure and organisation.
"Potential client and, even more importantly, people conflicts are considerable, exacerbated by a lack of pre-announcement consultation. And, finally, the regulatory and corporate governance issues are significant," he said.
"We believe a post-POG world presents us and other competitors, as a result, with enhanced opportunities and is at worst neutral and at best highly positive, resulting in further consolidation and concentration."
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