WPP says Olympics and U.S. election to boost 2008

By Kate Holton

LONDON (Reuters) - WPP, the world's second-largest advertising and marketing company, said underlying revenue growth would be better in 2008 than 2007, boosted by the Beijing Olympics and U.S. election.

The group met forecasts for 2007 underlying revenue growth, adding it had been boosted by record business wins towards the end of the year and had not felt any impact from the global financial crises.

But it warned again on Friday that the "real world" could be affected in 2009.

WPP reported like-for-like growth, a key industry metric which strips out the impact of acquisitions and currency fluctuations, of 5 percent.

Analysts said they expected the lack of any negative surprises and the relatively robust outlook statement to restore confidence. Its shares were up almost 1 percent at 617 pence.

"We have only preliminary data for January in 2008 and this shows like-for-like revenues up 5 percent," the company said.

"On the basis of these data, 2008 should be a better year than 2007, against the views of most economic forecasters, who predict a gloomy 2008."

The group, whose agencies include JWT and Young & Rubicam, reported 2007 revenues of 6.19 billion pounds ($12.27 billion) and adjusted pretax profit of 817 million pounds, ahead of analyst forecasts at 811 million pounds.

It stuck with operating margin targets of 15.5 percent for 2008 and 16 percent for 2009.

WPP was boosted in the final quarter of 2007 with "an historically unprecedented run of net new business wins" including accounts from AT&T Inc and Dell giving it estimated net new billings of 5.03 billion pounds for the year.

For 2008, it said it expected worldwide advertising and marketing services spending to rise by at least 4 percent with WPP to grow in excess of that and therefore increase share.

WPP Chief Executive Martin Sorrell has said for some time that 2008 ad budgets would be boosted by the U.S. Presidential election, the Beijing Olympics and the Euro 2008 Championship for soccer.

He told Reuters that the so-called quadrennial effect adds between 1 and 2 percent to worldwide ad spending.

He repeated his cautious outlook for 2009 but pleased analysts with more positive comments on 2010 and the impact from the soccer World Cup in South Africa, the Winter Olympics in Vancouver and the mid-term Congressional elections in the U.S.

"We believe WPP is attractive on a risk/reward basis and believe the group is well positioned to benefit from faster growing geographies," Numis analyst Lorna Tilbian said.