WPP sees profit slump

       WPP, the world's secondbiggest advertising group, said yesterday its first-half net profit sank 47.9% because of the global downturn but forecast a brighter performance for the rest of 2009.
       Net earnings sank to ฃ108.4 million ($177 million) in the six months to June from ฃ208.2 million a year earlier, WPP said in a results statement.
       Pre-tax profits dived 47% to ฃ179.3 million as a result of the "severe" worldwide recession.
       "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."
       The group said revenues increased 28.4% to ฃ4.29 billion, boosted by the takeover of market research company Taylor Nelson Sofres.
       WPP, which ranks second behind the US giant Omnicom, said it had slashed around 6,525 jobs over the past year as it sought to improve profitability.
       "The impact of the recession on the group's profitability in the first half was severe," WPP said, adding that action had also been taken to cut 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."
       The group also predicted that revenues would be flat next year despite a host of large events that should boost spending on advertising.
       "Although it is still very early to budget or forecast what may happen in 2010,top line revenues will probably be (flat)despite the positive impact of the Winter Olympics in Vancouver, the World Expo in Shanghai, the Asian Games in Guangzhou, the Fifa World Cup in South Africa and the mid-term Congressional elections in the United States," WPP said.
       The group bought British firm Taylor Nelson Sofres for ฃ1.2 billion in late 2008.