The one-minute expert
Your essential companion to this week's big events
Sunday 11 August 1996
What does that stand for?
Wire and Plastic Products.
You're making that up.
No. Really. It started out making shopping trolleys.
I thought it was in advertising.
Well, yes, it is now. Although it prefers to call it "marketing services". In fact it's the largest ad agency in the world, with pre-tax profits of pounds 113.7m last year.
This is a Great British Success Story then?
More of a back-from-the-brink story. The company came close to collapse during the recession and is only now finding its feet.
Is that why it's in the news?
Partly. This week it announces its results for the latest year. But investors will be most interested to hear what its boss, Martin Sorrell (pictured left), plans to do with it next.
Why did it nearly collapse?
Hubris. In its rush to become the biggest in the world it over-extended itself by buying already big firms like J Walter Thompson and Ogilvy & Mather. When the recession bit it had a debt of almost half a billion pounds.
It learned its lesson though.
Er, well, actually, now there's talk about it buying the French agency BDDP for about pounds 100m. A bidding war could shape up between an MBO team and the US advertising group Grey, driving the final price even higher.
Can anything save it from repeating its folly?
Its chief executive, Mr Sorrell, seems the most likely saviour.
A wise old captain guiding his trolley into a safe haven?
Well he does have an incentive - pounds 28m worth of incentive.
Did I hear someone purr?
That's over five years, although it does seem rather a lot. But if he meets his performance targets he'll be worth every million.
Targets? Like quadrupling shareholder value each month?
No, he just has to keep the share price above 198p.
But if they go on an acquisition spree...
Precisely, 's share price might well fall.
He's dead set against this purchase then.
He said the group wanted to concentrate on developing Henley Centre, its market research arm. But he has also often said his ambition is to have 100 per cent market share.
Is he under pressure from rivals nipping at his heels?
Not here. His biggest UK competitor, Saatchi & Saatchi, ousted its founding brothers from the board last year and US president, John Fitzgerald, on Friday.
Maurice and Charles wanted pounds 28m too?
They weren't exactly in penury. Now they've set up M&C Saatchi to win back the business they lost at their former company.
Where does this leave ?
Mopping up. With the Saatchi corporate clan quarrelling and other local agencies too small to fret about, only has to worry about its Madison Avenue competitors.
There may be trouble ahead.
Indeed. Omnicom and Interpublic, which rank second and third in the global advertising charts, have both been on buying sprees over the past year.
And Mr Sorrell's for fighting the challenge?
He wants his staff to do "better work faster".
Not a very catchy slogan.
Um, no. It isn't, is it?
Statistics: July UK producer price index figures.
Interims: Smith and Nephew, Group.
Interims: De Beers, General Accident, BOC (Q3), Sedgwick Group.
Statistics: July unemployment figures, June underlying average earnings and unit wage costs.
Interims: Glynwed International, MAID, Independent Insurance.
Statistics: July retail prices.
Interims: Johnson Group, Hanson (Q3).
Statistics: July public sector borrowing requirement.
Meetings: Thorn EMI EGM to approve demerger.
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