Interim Results - PART ONE

WPP Group PLC
22 August 2003


FOR IMMEDIATE RELEASE                                            22 AUGUST 2003



PART ONE

                                    WPP

                             2003 INTERIM RESULTS

                 Reported revenue down over 2% to £1.91 billion

                     Constant currency revenue up almost 2%

                           Like-for-like revenue flat

Profit before tax, goodwill and impairment and FRS 17 interest down almost 5% to
                              £202.9 million

         Diluted headline earnings per share down almost 5% at 12.8p

            Interim ordinary dividend up 20% to 2.08p per share







•        Revenue down over 2% to £1.91 billion and up almost 2% in constant
         currencies

•        Like-for-like revenue flat

•        Profit before interest, tax, goodwill and impairment down almost 8% to
         £234.1 million and down over 5% in constant currencies

•        Operating margin pre-goodwill and impairment of 12.3%

•        Profit before tax, goodwill and impairment and FRS 17 interest down
         almost 5% to £202.9 million and down over 2% in constant currencies

•        Diluted headline earnings per share down almost 5% to 12.8p from 13.4p
         and down almost 2% in constant currencies

•        Interim ordinary dividend up 20% to 2.08p per share

•        Estimated net new business billings of almost £1.335 billion ($2.135
         billion).  Ranked number one advertising and marketing services group 
         for the first six months of 2003





In this press release not all the figures and ratios used are readily available
from the unaudited interim results included in Appendix I.  Where required,
details of how these have been arrived at are shown in Appendix IV.



Summary of Results



The Board of WPP announces its unaudited interim results for the six months
ended 30 June 2003, reflecting further economic stabilisation and the start of
limited growth, notably in the United States.



Turnover was down 1.6% at £8.64 billion.



Reportable revenue was down 2.5% at £1.91 billion.  On a constant currency basis
revenue was up 1.8% compared with last year, mainly due to the weakness of the
United States dollar, partly offset by the strength of the euro against
sterling.  Excluding all acquisitions, including all discontinued operations,
although there were none, and all client gains and losses, constant currency
revenues were flat.



Profit before interest, tax, goodwill and impairment was down 7.8% to £234.1
million from £253.9 million and down 5.2% in constant currencies.



Pre-goodwill and impairment, reported operating margins fell to 12.3% from
13.0%.  On the same basis, before short-term and long-term incentives, operating
margins fell slightly to 14.3% from 14.4%.  Short and long-term incentives
amounted to £39 million or 14.3% of operating profits before bonus and taxes.



The Group's staff cost to revenue ratio, excluding incentives, was almost flat,
rising 0.1 margin points to 55.7% in the first half of 2003, compared with the
same period last year.  On a like-for-like basis the average number of people in
the Group was 49,359 in the first half of the year, compared to 52,083 in 2002,
a decrease of over 5%.  On the same basis, the total number of people in the
Group at 30 June 2003 was 49,350 compared to 51,651 in June 2002, a decrease of
4.5%.



Profit before tax, goodwill and impairment and FRS 17 interest was down 4.7% to
£202.9 million from £212.9 million.



Net interest payable and similar charges (including a notional charge of £5.8
million for FRS17) decreased to £37.0 million from £43.5 million, reflecting
lower interest rates partly offset by the impact of share re-purchases and
acquisition payments.



Reported profit before tax, reflecting increased goodwill and impairment
charges, fell by 11.6% to £153.6 million from £173.7 million. In constant
currency pre-tax profits fell by 9.2%.



The tax rate on profit on ordinary activities, before goodwill and impairment
and FRS 17 interest was 25%, the same as last year.



Profits attributable to ordinary share owners fell by 16.7% to £95.2 million
from £114.3 million, also due to increased goodwill and impairment charges.



Diluted earnings per share before goodwill and impairment and FRS 17 interest,
or headline earnings per share, fell by almost 5% to 12.8p from 13.4p. In
constant currency, earnings per share on the same basis fell by almost 2%.



The Board declares an increase of 20% in the interim ordinary dividend to 2.08p
per share.  The record date for this interim dividend is 17 October 2003,
payable on 17 November 2003.



Further details of WPP's financial performance are provided in Appendix I (in
sterling) and for illustrative purposes only in euros in Appendix II.  Appendix
III contains details of the impact of adopting transitional guidelines on the
expensing of options under FAS 148.



Review of Operations



Revenue by Region



The pattern of revenue growth differed regionally.  The table below gives
details of the proportion of revenue and revenue growth (on a constant currency
basis) by region for the first six months of 2003:


Region                                       Revenue as a %                   Revenue growth%
                                             of total Group                        03/02

North America                                     43.7                               2.2
United Kingdom                                    16.3                              -1.8
Continental Europe                                25.0                               2.7
Asia Pacific, Latin America,
Africa & Middle East                              15.0                               3.1
                                                   ___                               ___
TOTAL GROUP                                        100                               1.8
                                                   ___                               ___


As can be seen, the North American markets have not only stabilised but started
to show muted growth again.  This shift started in October 2002 and July 2003
marks ten months of continuous growth, albeit limited.



The United Kingdom continues to be most affected by the recession, with our
businesses in Continental Europe, particularly France, Germany, Italy and Spain
less affected than the competition.  Asia Pacific, Africa and the Middle East,
continues to improve despite the effect of SARS and Latin America improved
primarily due to last year's weak comparables, particularly in Brazil and
Argentina.



Estimated net new business billings of almost £1.335 billion ($2.135 billion)
were won in the first half of the year.  The Group was ranked first for net new
business gains in the Lehman Brothers and William Blair & Company surveys for
the first six months of 2003.



Revenue by Communications Services Sector and Brand



The pattern of revenue growth varied by communications services sector and
company brand.  The table below gives details of the proportion of revenue and
revenue growth by communications services sector (on a constant currency basis)
for the first six months of 2003:


Communications Services                       Revenue as a                     Revenue growth%
                                            % of total Group                        03/02

Advertising, Media
Investment Management                             46.2                                 3.7
Information, Insight &
Consultancy*                                      17.5                                 3.6
Public Relations &
Public Affairs                                    11.3                                -2.9
Branding & Identity,
Healthcare & Specialist
Communications*                                   25.0                                -0.6
                                                   ___                                 ___
TOTAL GROUP                                        100                                 1.8
                                                   ___                                 ___


*  In 2003, certain of the Group's specialist communications companies in
strategic marketing, consulting and consultancy were transferred into the
re-named information, insight and consultancy.



Media investment management like-for-like revenue comparisons started to improve
in October 2002, and then significantly from April 2003, primarily driven by the
strong United States upfront media buying season.



Advertising has followed this trend but less strongly.  Information, insight and
consultancy has continued to be relatively less affected by the recession and
branding and identity, healthcare and specialist communications has started to
pick up slightly, although healthcare, direct, interactive and internet
activities have been more resilient throughout the recession.  Public relations
and public affairs, continue to be more affected by the recession, although less
so than recently and two of our brands have seen a significant recent pick-up in
new business activity.



Advertising and Media Investment Management



On a constant currency basis, combined revenue at Ogilvy & Mather (including
OgilvyOne), J Walter Thompson Company, Y&R, Red Cell, MindShare and mediaedge:
cia grew by 3%, with operating margins flat.



These businesses generated estimated net new business billings of £1,063 million
($1.7 billion).



Information, Insight and Consultancy



The Group's information, insight and consultancy businesses continued their
growth, despite global economic conditions, with revenues increasing by well
over 3%, but operating margins were down reflecting the continued impact of the
recession primarily on our call centre operations.



Public Relations and Public Affairs



In constant currencies, the Group's public relations and public affairs revenues
fell by less than 3%.  The continuing recession has affected this sector the
most, although the recovery in the United States has to some extent mitigated
the downturn in the United Kingdom and some Continental European markets.
Markets in Asia Pacific were also negatively impacted by the outbreak of SARS.
Operating margins, however, improved by over one margin point in the first half.



Branding and Identity, Healthcare and Specialist Communications



The Group's branding and identity, healthcare and specialist communications
revenues were down very slightly over last year, with operating margins almost
flat.  Particularly good performances were registered by several companies in
this sector in the first half, including, in promotion and direct marketing by
EWA, Mando Marketing, Maxx Marketing, OgilvyOne, The Grass Roots Group, VML and
Wunderman; in branding and identity by MJM Creative and The Brand Union; and in
specialist marketing services by Forward, JWT Specialised Communications, The
Bravo Group and The Geppetto Group.



Cashflow and Balance Sheet



A summary of the Group's unaudited cashflow statement and balance sheet and
notes as at 30 June 2003 are provided in Appendices I and II.



In the first half of 2003, operating profit was £175 million, depreciation,
amortisation and impairment £96 million, interest paid £48 million, tax paid £43
million, capital expenditure of £33 million and other net cash inflows of £17
million.  Free cashflow available for debt repayment, acquisitions and share
re-purchases was, therefore, £164 million.  This free cashflow was absorbed by
£147 million in net cash acquisition payments and investments, (of which £95
million was for initial acquisition payments, £45 million was for earnout
payments and the balance related to prior year loan note redemptions), and £23
million in share re-purchases, a total outflow of £170 million.  This almost
balanced free cashflow in line with our recently introduced objectives.  In
addition, by the half year end, the Group had acquired £177 million of bank debt
from certain Cordiant Communications Group plc ("Cordiant") lenders and raised
£100 million by means of a share placing at £4.86 pence per share.



Net debt averaged £1,312 million for the six months ended 30 June 2003, versus
£1,327 million for the comparable period ended 30 June 2002.  On 30 June 2003
net bank borrowings were £1,153 million, against £1,160 million on 30 June 2002.

The Board continues to examine ways of deploying the Group's substantial
cashflow of approximately £400 million per annum to enhance share owner value
given that interest cover remains strong at over six times in the first half of
2003 in comparison to over five times in the comparable period last year.  As
necessary capital expenditure approximates to the depreciation charge, the
Company has continued to concentrate on examining possible acquisitions or
returning excess capital to share owners in the form of dividends or share
buy-backs.



In the first half of 2003, acquisitions have been completed in advertising and
media investment management in the United States, the United Kingdom, Italy,
Switzerland, South Korea, New Zealand and Ecuador; in information, insight and
consultancy in the United States, the United Kingdom, Portugal and Spain; in
public relations and public affairs in Sweden; and in healthcare in the United
States.



The saga surrounding the acquisition of Cordiant was concluded on 1 August by
means of a Scheme of Arrangement.  Since then integration has proceeded
according to plan, with the combination of clients and businesses and
discussions continuing with clients and people, where necessary.  As previously
announced, on 20 August Publicis Groupe SA paid £75m for the purchase of
Cordiant's 25% equity ownership in ZenithOptimedia.  Cordiant currently
continues to own Zenith franchises in nine markets and has trading relationships
in a further fourteen markets.  This brings Cordiant's disposals to a total of
£160 million over the last two months, in comparison to a pre-disposal net debt
level of £235 million.



In addition to increasing the interim dividend by 20% to 2.08p per share, at a
total cost of £24.5 million compared to £20.0 million last year, the Company has
continued its rolling share buy-back programme in the first half of the year by
repurchasing 5.6 million shares at an average price of £3.60 per share and total
cost of £20.2 million. The Company's objective remains to buy-back approximately
£100 million - £150 million of shares each year, currently equivalent to 11/2 -
2% of the ordinary share capital.



Client Developments in the First Half of 2003



Including associates and recently acquired Cordiant, the Group currently employs
over 69,000 full-time people in over 1,700 offices in 104 countries.  It
services over 300 of the Fortune Global 500 companies, over one-half of the
Nasdaq 100, over 30 of the Fortune e-50, and approximately 333 national or
multi-national clients in three or more disciplines.  More than 130 clients are
served in four disciplines and these clients account for over 50% of Group
revenues.  This reflects the increasing opportunities for co-ordination between
activities both nationally and internationally. The Group also works with well
over 100 clients in 6 or more countries.



The Group estimates that more than 35% of new assignments in the first half of
the year were generated through the joint development of opportunities by two or
more Group companies.



Current Progress and Future Prospects



The Group's financial performance in the first half of the year mirrored
stabilisation and the slight improvement in economic conditions in the United
States, countered to some extent by the continuing recession in the United
Kingdom and parts of Continental Europe, and the relatively minor affects of
SARS in Asia.  Like-for-like revenue was flat in the first half of 2003, again
exceeding the budgeted decline of almost 1%.  July like-for-like revenues were
up over 2%.  A pre-goodwill and impairment operating margin of 12.3% was
achieved, better than that budgeted, due principally to higher than budgeted
revenues and a reduction in, and the variability of, non-staff costs.



We have now had almost three recessionary years, defined as a significant slow
down in growth rates, as well as two consecutive quarterly declines in growth.
This recession was led by a business-to-business downturn marked by a reduction
in capital expenditure and similar investments, including in advertising and
marketing services.  The consumer has proved to be more resilient, with
borrowing and spending being driven by low interest rates, discounting and zero
coupon financing.  In a close to zero inflationary environment with little
pricing flexibility, clients have focussed on cutting costs and improving
margins, liquidity and profitability.  As a result, there are recent signs of
increased business-to-business spending, particularly in technology.



Most importantly, significant government deficit spending is stimulating the
United States economy, in particular in preparation for the 2004 United States
Presidential election.  The growth in United States government spending is
currently greater than at any time since the Vietnam War in 1967.  As we have
indicated before, this bodes well for the prospects for 2004, further stimulated
by the Athens Olympic Games, the Portuguese European Football Championship and
heavy United States political advertising expenditure driving up media pricing.
Certainly, it seems as though we are starting to climb out of the bath.  The
question remains, however, how inflationary all of this will be and the
consequent impact on 2005 and beyond.  Given these prospects and the results for
the first half of 2003, the Group's margin target of 13.8% in 2004 looks
achievable.  For the full year in 2003, the addition of Cordiant may result in
modest margin dilution, but not at the expense of earnings per share.



Plans, budgets and forecasts of revenues will continue to be made on a
conservative basis and considerable attention is still being focused on
achieving margin and staff cost to revenue or gross margin targets.  Margins
continue to be strong in important parts of the business.  For example, the
combined operating margins of our advertising and media investment management
sector, are still over 14%.  Geographically, North American operating margins
are almost 16%.  In addition to influencing absolute levels of cost, the
initiatives taken by the parent company in the areas of human resources,
property, procurement, information technology and practice development continue
to improve the flexibility of the Group's cost base.



The Group continues to improve co-operation and co-ordination between companies
in order to add value to our clients' businesses and our people's careers, an
objective which has been specifically built into short-term incentive plans.
Particular emphasis and success has been achieved in the areas of media
investment management, healthcare, privatisation, new technologies, new markets,
retailing, internal communications, hi-tech, financial services and media and
entertainment.



The Group also continues to concentrate on its strategic objectives of improving
operating profits by 10-15% per annum; improving operating margins by half to
one margin point per annum or more depending on revenue growth; improving staff
cost to revenue or gross margin ratios by 0.6 margin points per annum or more
depending on revenue growth; converting 25-33% of incremental revenue to profit
and growing revenue faster than industry averages and encouraging co-operation
among Group companies.



As clients face an increasingly undifferentiated market place, the Group is
competitively well positioned to offer them the creativity they desire, along
with the ability to deliver the most effective co-ordinated communications in
the most efficient manner.  The rise of the procurement function, the increasing
concentration of distribution and the legislative encouragement of media
concentration in several countries, will further stimulate consolidation amongst
clients, media owners, wholesalers and retailers and last, but not least,
advertising and marketing services agencies.  The Group is very well positioned
to capitalise on these developments and to focus on developing the best talents,
the strongest management structures and the most innovative incentive plans in
the industry for our people.



For further information:


Sir Martin Sorrell                )
Paul Richardson                   )        44-20-7408-2204
Feona McEwan                      )        1-212-632-2301



www.wppinvestor.com









This announcement has been filed at the Company Announcements Office of the
London Stock Exchange and is being distributed to all owners of Ordinary shares
and American Depository Receipts.  Copies are available to the public at the
Company's registered office.



The following cautionary statement is included for safe harbour purposes in
connection with the Private Securities Litigation Reform Act of 1995 introduced
in the United States of America.  This announcement may contain forward-looking
statements within the meaning of the US federal securities laws.  These
statements are subject to risks and uncertainties that could cause actual
results to differ materially including adjustments arising from the annual audit
by management and the Company's independent auditors.  For further information
on factors which could impact the Company and the statements contained herein,
please refer to public filings by the Company with the Securities and Exchange
Commission.  The statements in this announcement should be considered in light
of these risks and uncertainties.




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