Advertising giant WPP plans return to UK
Thursday 30 August 2012
Advertising giant WPP gave Chancellor George Osborne a boost today by confirming plans to move its headquarters back to the UK.
The FTSE 100 Index company, which is headed by Sir Martin Sorrell, has been based in Dublin since 2008 following changes to the corporate tax regime introduced by Mr Osborne's predecessor Alistair Darling.
But with the coalition removing the threat of double taxation on overseas earnings by multinational companies from next year, WPP said it will ask its shareholders to vote in December on a proposal to return to the UK.
The move came as WPP announced a 7% rise in pre-tax profits to £358 million for the six months to June 30. But it disappointed investors by downgrading its forecast on underlying revenues growth for this year to 3.5% from 4%.
It reported a slowing of revenues in the United States and certain markets in western Europe, but said the UK and faster-growing markets such as Latin America were doing well.
WPP owns companies including public relations firm Ogilvy, communications agency RLM Finsbury and market research firm Kantar Worldpanel. Its shares were 4% lower today.
Sir Martin said 2013 was likely to be more challenging, even though GDP forecasts are for stronger growth than in the current year.
There will be no major sporting events in the year and the next American president will have to confront the country's growing budget deficit, possibly in the face of a deadlocked Congress.
However, he added that 2014 looked a better prospect with the World Cup in Brazil and the Winter Olympics in Sochi, Russia, set to boost the profile of the two countries in the same way as China and South Africa benefited from the Olympics and World Cup respectively.
Latin America showed the strongest growth in the second quarter of the year, with like-for-like revenues up more than 13%. In the UK, underlying revenues were up 3.5% in the three month period, having improved on the previous quarter.
First-half profits in the UK were slightly lower at £73 million, while the figure for North America was £30 million higher at £239 million. However, revenues growth slowed in the second quarter as clients reduced spending in the run up to the US election.
WPP employs more than 162,000 staff in 3,000 offices in 110 countries.
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