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WPP acquires full ownership of agencies across Asia as region sees moderate growth

WPP has acquired full ownership of Y&R and Wunderman joint venture agency assets across South East Asia and Taiwan after signalling stronger growth in certain regional markets.

The holding company has taken full ownership of Y&R in Malaysia, Singapore, Thailand and Vietnam, plus Wunderman in Taiwan and Thailand.

It has also taken full ownership of Dentsu Sudler & Hennessey in Japan following a share swap with Dentsu Inc. The new entity will now be rebranded as Sudler, removing the link to WPP’s rival holding company.

According to the announcement, WPP’s companies in Asia-Pacific generated revenues of almost US$4.8 billion.

In its latest quarterly update, the region as a whole saw a marginal revenue increase of 0.7 per cent, with particularly strong growth in Japan and South Korea – both of which saw 5-10 per cent growth.

Greater China, which is cited as one of WPP’s six billion-dollar markets, had a moderately strong year after witnessing 2.1 per cent growth, with a 3.6 per cent rise coming from the Mainland.

Thailand also experienced a reasonably strong quarter with up to 5 per cent growth.

Meanwhile, India saw its revenue growth fall year-on-year from 1.1 per cent to just 0.3 per cent growth.

Sitting at the bottom of Asia’s rankings were Indonesia, the Philippines and Singapore, which all posted negative results.

By sector, the group’s data assets proved to be the poorest performing with the data inventory management business falling 6.9 per cent, or 2.3 per cent on a constant currency basis.

The group’s core advertising and media investment management business, which accounts for nearly half of the organisation’s income, reported a 5.7 per cent fall, which will be flat when adjusted for currency movements against the pound.

In a statement, joint COOs Mark Read and Andrew Scott indicated the company is preparing for change after in the face of a changing market: “We intend to build on these strengths by taking a fresh look at our strategy, developing a vision for the Group that recognises the challenges and opportunities presented by the structural shifts in our industry, and executing resolutely against it.

“Our priority is to focus on growth. We will proactively address the under-performing parts of our business and we need to ensure that our capital is deployed to those areas that will grow fastest and maximise shareholder value.”

The company’s debt load also increased with net debt at 31 March 2018 being £5.198 billion, compared to £4.844 billion in 2017 at current exchange rates, an increase of £354 million. The company also said it is undertaking to reduce its EBITDA to debt ratio over the next 12 to 18 months.

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