Advertising giant WPP confirmed plans to move its headquarters back to the UK yesterday but disappointed investors with a downgrade to its growth forecasts.
The FTSE 100 company has been based in Dublin since 2008 after changes to corporate tax rules introduced by Alistair Darling meant it could have been charged twice for overseas earnings.
It has talked of returning after the coalition government lifted the threat, and will seek permission from shareholders in December.
The group, which employs more than 162,000 in 110 countries, said pre-tax profits for the six months to June were 7 per cent higher than last year at £358 million. It hiked its interim dividend by 18 per cent to 8.8p.
But the firm said clients in the US and Europe were becoming increasingly cautious with their marketing budgets, although the UK bucked the trend. In what should be a strong year for WPP, with advertising spending boosted by the US election, the London Olympics and Euro 2012 football tournament, the group trimmed its revenue growth target from 4 per cent to 3.5 per cent.
Chief executive Sir Martin Sorrell said it was not a lack of confidence, but “uncertainty” that was causing firms to rein in their spending.
The group says 2013 also looks like a difficult year, with few major sporting events to encourage large advertising campaigns, but expects 2014 to be better.
Jonathan Jackson, at Killik & Co, said WPP’s exposure to digital media formats and fast-growing emerging markets meant the shares were still good value.
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Sunday 19 May 2013
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