AGM Statement

WPP Group PLC
27 June 2006




For Immediate Release                                               27 June 2006

                                      WPP
                                        
                      ANNUAL GENERAL MEETING TRADING UPDATE
                          FOR FIRST FIVE MONTHS OF 2006

                         REPORTED REVENUES UP OVER 17%

                     CONSTANT CURRENCY REVENUES UP OVER 13%

                      LIKE-FOR-LIKE REVENUES UP OVER 4.5%

              FIRST FIVE MONTHS' OPERATING MARGIN AHEAD OF BUDGET

                    AND IN LINE WITH FULL YEAR MARGIN TARGET



The following statement was made by the Chairman at the Company's 34th Annual
General Meeting held in London at noon today:


"First, a few comments on current trading over the first five months of this
year. 2006 has seen further continued growth in revenue, profit and margins,
following the record performance in 2005.


On a reportable basis, worldwide revenues were up over 17%. In constant
currencies, revenues were up over 13%. Currency fluctuations in the first five
months of 2006 were principally due to the weakness of sterling against the US
dollar. On a like-for-like basis, excluding acquisitions and currency, revenues
were up 4.5%. This maintains the improvement in the organic growth rate of the
last twenty months, which began towards the end of 2004 and continued through
2005 and the first quarter of 2006.


Geographically, on a constant currency basis, all regions, with the exception of
the United Kingdom, showed double-digit revenue growth. In the US, revenues were
up almost 12%. In Europe, the UK was up over 6% and Continental Europe up over
11%. Eastern Europe was up over 49%. Asia Pacific, Latin America, Africa and the
Middle East were up almost 23%.


By communications services sector, advertising and media investment management
was up over 11%, information, insight & consultancy up almost 8%, public
relations and public affairs up over 12% and branding and identity, healthcare
and specialist communications up over 20%.


The United States continues to grow, like-for-like revenues up almost 4%,
similar to the first quarter. Asia Pacific, one of our strongest growing
regions, showed continued strength, with like-for-like revenues up over 8%. The
Middle East continued its strong growth seen in the first quarter and remains
our fastest growing area. Western Continental Europe, although still relatively
more difficult, has, together with the UK, stabilised. The UK, however, remains
the slowest growing region in the Group, as it was in the first quarter.


Media investment management, as in 2005 and the first quarter of 2006, continues
to show the strongest growth of all our communications services functions, along
with direct, internet and interactive and healthcare communications. Direct,
internet and interactive related activities now account for almost 18% of the
Group's revenues, up from 15% last year. Public relations and public affairs
also continue to show improvement over last year and the first quarter,
following a strong year in 2005.


The Group's operating companies continued to improve productivity in 2006 with
average headcount, on a like-for-like basis, up 3.4% compared with revenue
growth of 4.5% and a consequent increase in revenue per head in the first five
months. Operating margins in the first five months were ahead of budget and in
line with the Group's full year margin objective of 14.5%, compared with 14.0%
in 2005. The Company continues to make significant progress in winning major new
business assignments, ranking number one in all the new business tables for the
first five months of the year.


The Group's professional and financial strategy continues to be focused on five
objectives: increasing operating profit by 10% to 15% per annum; increasing
operating margins by half to one margin point per annum; reducing staff cost to
revenue ratios by up to 0.6 margin points per annum; growing revenue faster than
industry averages; and improving our creative reputation and stimulating
co-operation among Group companies.


Average net debt for the first five months of this year was £1,163 million,
compared to £999 million in 2005, an increase of £164 million. Currently surplus
cash flow amounts to approximately £750 million per annum. Alternatives for the
use of this cash flow are capital expenditure, acquisitions, dividends and share
buy-backs. Capital expenditure, mainly on information technology and property,
is expected to remain equal to or less than the depreciation charge in the long
term. In the first five months of this year, the Group made acquisitions or
increased equity stakes in advertising & media investment management in the US,
the UK, Germany, South Africa, Israel, China, Hong Kong, Singapore and Brazil;
in public relations & public affairs in India; in direct, internet & interactive
in the US.



Your Board also continues to focus on examining the alternative between
increasing dividends and accelerating share buy-backs, and recently completed a
review of its share buy-back policy. The Group will accelerate its share
repurchase programme and will now aim to buy-back up to 2-3% of its share
capital, as compared to 1-2% historically. In the first five months of 2006,
20.979 million ordinary shares, equivalent to almost 2% of the share capital,
were purchased, including 5.5 million ordinary shares acquired by the WPP ESOP
in connection with restricted stock awards. These shares were acquired at an
average price of £6.78 per share and total cost of £142.2 million. Of these
shares, 15.5 million were purchased in the market and subsequently cancelled.

Professionally, the parent company's objectives continue to be to encourage
greater co-ordination and co-operation between Group companies, where this will
benefit our clients and our people, and to improve our creative product. As both
multi-national and national clients seek to expand geographically, while at the
same time seeking greater efficiencies, the Group is uniquely placed to deliver
added value to clients with its coherent spread of functional and geographic
activities.


To these ends we continue to develop our parent company talents in five areas:
in human resources, with innovative recruitment programmes, training and career
development, and incentive planning; in property, which includes radical
re-design of the space we use to improve communication as well as the
utilisation of surplus property; in procurement, to ensure we are using the
Group's considerable buying power to the benefit of our clients; in information
technology, to ensure that the rapid improvements in technology and capacity are
deployed as quickly and effectively as possible; and finally in practice
development where cross-brand or cross-tribe approaches are being developed in a
number of product or service areas: media investment management, healthcare,
privatisation, new technologies, new faster growing markets, internal
communications, retail, entertainment and media, financial services, and hi-tech
and telecommunications.


In addition, we continue to seek to improve our creative product in as broadly a
defined sense as possible, by recruiting, developing and retaining excellent
talent, acquiring outstanding creative businesses, recognising and celebrating
creative success. Significant progress was made at the Advertising Festival in
Cannes last week, for example.


And finally, a reminder: 2005 was a very good year.


But of course, what those aggregate numbers fail to reveal are the extraordinary
number, range and diversity of quite separate achievements that go to make up
those impressive company totals.


By applying their brains and their talent and their experience to the service of
their clients, every company in every discipline on every continent has
contributed to that parent company total. The contribution of some 92,000
individual people, representing a vast variety of skills, has gone to make up
that parent company total.


And, as always, it is those individual skills that our clients value, and pay
for. Project by project, some tens of thousands of them in all, as WPP companies
helped make their clients more successful, so, project by project, they added
inexorably to the figures presented here.


So it is entirely right that we should end this statement by acknowledging the
true source of our success - and offering our wholehearted gratitude to all
those many people who made it happen."


For further information, please contact:



Sir Martin Sorrell )
Paul Richardson    )  44 (0) 20 7408 2204
Feona McEwan       )

Fran Butera          (1) 212 632 2235




www.wpp.com



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