WPP breaks £1bn barrier but Sorrell sees clouds

Annual pre-tax profits jumped 20% to hit £1 billion for the first time at the group that owns ad agencies Ogilvy & Mather and JWT, media-buyers GroupM and public relations firm Burson-Marsteller.

Revenues also hit a new record of £10.02 billion - up 5.3% on a like-for-like basis. Sorrell claimed it was "a pretty hot year" and cheered shareholders by announcing a 38% rise in the dividend to 24.6p.

The WPP chief was upbeat about this year with the Olympics, Euro football championships and the US presidential elections all combining to provide a boost. Even so, Sorrell forecast like-for-like revenue growth of 4% this year - slower than 2011.

He was more concerned about next year because he fears "legislative gridlock" in America and there will be no major global sporting events. However, he was hopeful the eurozone might now "avoid catastrophe".

WPP's business in the UK was one of the outstanding performers last year, with revenues up 6.7%, despite the tough economy. The group won business from clients such as Barclays, Virgin Atlantic, Vodafone and, last month, News International.

Global staff numbers rose from 105,000 to 110,000, with the UK alone adding 903 jobs. "This is yet another demonstration of the fact that growth creates jobs," said Sorrell, who pointed out the company paid almost 12% extra in UK employer income tax and national insurance. He admitted that WPP wanted to underline its contribution "because there's a lot of comment about tax and all that".

Sorrell has come under fire for moving the company's tax base from London to Dublin in 2008, reducing the Treasury's corporation tax take. He insisted that he still intends to return to the UK - a year after he first promised to do so, in the wake of Chancellor George Osborne's promise to ease tax rules on overseas earnings in the Budget.

The WPP chief had warned late last year that he still wanted more clarity from the Treasury but said today: "I'm delighted to say clarity seems improved, the only qualification being that what is indicated [by Osborne] is embodied in legislation, which I think will happen shortly.

Then I think we'll be on our way back." The shares leapt 3.5% or 28.5p to 832p - their highest in a year.

Blow to Bell

Lord Bell's hopes of buying out public relations group Bell Pottinger from Chime Communications today received a blow as leading shareholder WPP opposed the move.

"I think it sets a terrible precedent," WPP's chief executive Sir Martin Sorrell, pictured, told the Evening Standard.

"It isn't logical, and if you start to dismember the management of it, where does that begin and where does that end?

"As an investor in the company, one would rather it stayed together than split asunder," he added. WPP has around an 18% holding in Chime.