Wednesday August 26, 09:54 AM
Advertising giant WPP sees near 50% profit slump
LONDON (AFP) - WPP (LSE: WPP.L - news) , the world's second-biggest advertising group, said Wednesday that its first half net profit tumbled 47.9 percent because of the global economic downturn.
Net earnings sank to 108.4 million pounds in the six months to June from 208.2 million pounds a year earlier, WPP said in a results statement.
"The results continue to reflect the impact of the significant global economic contraction on most regions and service sectors," WPP said.
"The impact continued to intensify in the second quarter, though results for July did indicate a 'less-worse' picture."
WPP said revenues increased 28.4 percent to 4.29 billion pounds, boosted by the takeover of market research company Taylor Nelson Sofres (LSE: TNN.L - news) .
The group, which ranks second behind US giant Omnicom, predicted a brighter performance for the second half.
"The impact of the recession on the group's profitability in the first half was severe," WPP said, adding that action had been taken to cut staff and discretionary costs such as travel and training.
"Further cost actions have been taken in the second quarter, which have also impacted profitability in the first half, through additional severance costs but (this) will improve the picture in the second half."
WPP bought British firm Taylor Nelson Sofres for 1.2 billion pounds in late 2008.
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