TNS helps bolster WPP's first-quarter revenues

UK-- WPP's revenue was down 6% on an organic basis in the first quarter, falling short of expectations, but the acquisition of TNS helped it achieve 36% growth on a reported basis.

The group has revised down its full-year forecasts for like-for-like revenue, saying the fall is likely to be “closer to mid-single digits” than the 2% previously forecast.

Citi Investment Research commented this morning that the downgrade to forecasts was “a little disappointing”, and would be the focus for investors.

The acquisition of TNS has more than doubled the revenue of WPP's Kantar research division to £552m – one quarter of the group's total revenue of £2.1bn.

WPP said market research was marginally more affected by the economic conditions than advertising, but fared better than branding, healthcare and specialist communications.

Organic growth figures for Kantar were not broken out in the results published today, but the group did say it saw like-for-like revenue declines in North America and Continental Europe while the UK, Latin America and Africa grew.

There was “strong” organic growth from TNS's grocery purchasing data business Worldpanel, media researcher iTram, India's IMRB, call centre operator Center Partners and the MRB Group, with Lightspeed Research also showing positive growth.

On the outlook for the rest of the year, the group said: “The short-term focus will continue to be on balancing the likely fall in revenues against staff costs and headcount. The first half of 2009 will clearly be very difficult, with the second half, although continuing to be tough, likely to improve relatively. Any recovery, of sorts, will probably come in 2010.”

Author: Robert Bain

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