Interim Results

WPP Group PLC
20 August 2001

PART 1

FOR IMMEDIATE RELEASE                                            20 AUGUST 2001


                                     WPP
                            2001 INTERIM RESULTS



                    Revenue up over 65% to £1.997 billion

   Profit before tax up almost 80% to £247.6 million against £137.7 million

         Diluted earnings per share up almost 22% to 14.6p from 12.0p

              Interim ordinary dividend up 20% to 1.44p per share



*        Revenue up over 65% to £1.997 billion and up over 58% in constant
         currencies



*        Profit before interest and tax up almost 73% to £277.8 million and
         up over 67% in constant currencies



*        Operating margin up one margin point and one margin point in
         constant currencies in line with objectives



*        Profit before tax up almost 80% to £247.6 million and up almost 75%
         in constant currencies



*        Diluted earnings per share up almost 22% to 14.6p from 12.0p and up
         18% in constant currencies



*        Interim ordinary dividend up 20% to 1.44p per share



*        Net new business billings of almost £900 million ($1.4 billion).
         Ranked number one advertising and marketing services group for the     
         first seven months of 2001



Summary of Results



The Board of WPP Group plc announces its results for the six months ended 30
June 2001, which show significant continued improvement despite difficult
economic conditions, particularly in the United States.



Turnover was up over 58% to £9.0 billion in the first six months of 2001.



Reportable revenue was up over 65% at £1.997 billion.  On a constant currency
basis revenue was up over 58%.  Pro-forma for the merger with Young & Rubicam
Inc. ('Y&R'), constant currency revenues were up almost 6%.  Excluding all
acquisitions, constant currency revenues were up over 3%.



Profit before interest and tax was up almost 73% to £277.8 million from £160.7
million and up over 67% in constant currencies.



Pre-goodwill, reported operating margins rose by 0.9 margin points to 14.2%
from 13.3%, and in constant currencies the operating margin grew by one margin
point.  On a reportable pro-forma combined basis, allowing for the merger with
Y&R and excluding goodwill charges, operating margins rose by one margin
point.  Reported operating costs rose by over 63% and rose by almost 57% in
constant currencies.



The Group's staff cost to gross margin ratio, excluding severance commitments,
was flat at 59.6% in the first half of 2001, compared to the same period last
year.  On a like-for-like basis the average number of people in the Group was
51,007 in the first half of the year, compared to 49,352 in 2000, an increase
of 3.4%.  On a like-for-like basis, the total number of people in the Group at
the half year end was 50,691, compared to 52,623 at the end of 2000, a
decrease of 3.7% and compared to an actual figure of 31,416 in June 2000.



Net interest payable and similar charges increased to £30.2 million from £23.0
million, reflecting improved profitability and lower interest rates more than
offset by the impact of share repurchases and acquisitions.



Reported profit before tax rose by almost 80% to £247.6 million from £137.7
million. In constant currency pre-tax profits rose by almost 75%.



The tax rate on profit on ordinary activities was steady at 30% in comparison
with last year.



Diluted earnings per share were up almost 22% at 14.6p, and up 18% in constant
currencies.



The Board declares an increase of 20% in the interim ordinary dividend to
1.44p per share.  The record date for this interim dividend is 14th September
2001, payable on 19th November 2001.



Further details of WPP's financial performance are provided in Appendix I (in
sterling) and Appendix II (in euros).



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 2001:


Region                                           Revenue as a %        Revenue
                                                 of total Group        growth%
                                                                         01/00

North America                                              46.6           59.3
United Kingdom                                             15.7           27.9
Continental Europe                                         21.2           86.5
Asia Pacific, Latin America, Africa & Middle
East                                                       16.5           62.7
                                                           
                                                            ___            ___
TOTAL GROUP                                                 100           58.6





Including Y&R, on a pro-forma combined basis, the proportion of revenue and
revenue growth by region was as follows:


Region                                           Revenue as a %        Revenue
                                                 of total Group        growth%
                                                                         01/00

North America                                              46.6            0.4
United Kingdom                                             15.7            5.2
Continental Europe                                         21.2           13.4
Asia Pacific, Latin America, Africa & Middle
East                                                       16.5           12.9
                                                           
                                                            ___            ___
TOTAL GROUP                                                 100            5.6





As can be seen, on a pro-forma combined basis, North America was flat in the
first six months. The United Kingdom, Continental Europe, Asia Pacific, Latin
America, Africa and the Middle East grew more robustly.



Net new business billings of almost £900 million ($1.4 billion) were won in
the first half of the year.  The Group was ranked first for net new business
gains in the Credit Suisse First Boston survey for the first seven months of
2001.









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 2001:


Communications Services                               Revenue as a      Revenue
                                                        % of total      growth%
                                                             Group        01/00

Advertising and Media Investment Management                   45.7         58.2

                                                              
Information and Consultancy                                   14.3         14.5
Public Relations and Public Affairs*                          13.1        105.0
Branding and Identity, Healthcare and Specialist
Communications                                                26.9         76.0
                                                              
                                                               ___          ___
TOTAL GROUP                                                    100         58.6



*     The revenue figures submitted to the O'Dwyer Report reflect some public
relations income which is included here in advertising and media investment
management and branding and identity, healthcare and specialist
communications.  Total public relations and public affairs revenues grew over
88% to $419 million.



Including Y&R, on a pro-forma combined basis, the proportion of revenue and
revenue growth by communications services sector was as follows:


Communications Services                               Revenue as a      Revenue
                                                        % of total      growth%
                                                             Group        01/00

Advertising and Media Investment Management                   45.7          5.9

                                                              
Information and Consultancy                                   14.3         14.5
Public Relations and Public Affairs                           13.1          0.8
Branding and Identity, Healthcare and Specialist
Communications                                                26.9          3.4
                                                              
                                                               ___          ___
TOTAL GROUP                                                    100          5.6





As can be seen, on a pro-forma combined basis, public relations and public
affairs and branding and identity, healthcare and specialist communications
have been most affected by the recession.  Advertising and media investment
management has been less affected than anticipated and information and
consultancy continues to grow strongly.



Advertising and Media Investment Management



On a constant currency basis, combined revenue at Ogilvy & Mather (including
Cole & Weber and OgilvyOne), J Walter Thompson Company, Y&R Advertising
(including The Media Edge), Red Cell and MindShare rose by 10%, whilst
operating margins continued to improve.



These businesses generated net new business billings of £565 million ($877
million).



Information and Consultancy



The Group's information and consultancy businesses continued their growth,
despite global economic conditions, with revenues increasing by over 14%,
operating profit up over 17% and as a result improving operating margins.



Public Relations and Public Affairs



In constant currencies, the Group's public relations and public affairs
revenues showed continued growth, primarily due to acquisitions, rising by
105%.  However, the recession has affected this sector the most significantly,
with like-for-like revenues falling by over 3%, reflecting the slow down in
technology, media and telecommunications in particular.



Branding and Identity, Healthcare and Specialist Communications



The Group's branding and identity, healthcare and specialist communications
revenues grew by 76% over last year, again primarily due to acquisitions.
Including Y&R, on a pro-forma combined basis, revenues grew over 3% with
operating profits up over 20% and operating margins improving.  Particularly
good performances were registered by several companies in this sector in the
first half, including, in promotion and direct marketing by EWA, High Co,
Mando Marketing, RTC and Wunderman; in branding and identity by Addison
Corporate Marketing, CB'a, Dovetail, Lambie-Nairn, WalkerGroup/CNI and
Warwicks; in healthcare by CommonHealth (US), The Shire Hall Group and Sudler
& Hennessey; and in other specialist marketing services by The Bravo Group,
Brouillard Communications, The Farm, The Geppetto Group, Glendinning and Pace.



Cash flow and Balance Sheet



A summary of the Group's cashflow statement and balance sheet and notes as at
30 June 2001 are provided in Appendices I and II.



Improved profitability has continued to have a positive effect on the Group's
balance sheet.  In the first half of 2001, operating profit was £257 million,
depreciation and amortisation £59 million, interest paid £26 million, tax paid
£35 million and other cash inflows £48 million.  This resulted in net cash
generation of £303 million for the first six months of 2001, compared to £131
million in the comparable period last year.  The Group invested £62 million in
capital expenditure, £287 million in cash acquisition payments and investments
and £70 million in share repurchases and dividends, a total outflow of £419
million.



For the twelve months ended 30 June 2001 the net cash generation was £570
million which was invested in capital expenditure of £144 million, cash
acquisition payments and investments of £416 million and share repurchases and
dividends of £144 million, a total expenditure of £704 million.  Net debt
averaged £662 million for the first half of 2001, including the £204 million Y
&R convertible bond, versus £325 million for the same period last year. On 30
June 2001 net bank borrowings were £620 million, including the Y&R convertible
bond of £204 million, against £292 million on 30 June 2000.



The Board continues to examine ways of deploying the Group's substantial
cashflow of approximately £600 million per annum to enhance share owner value
particularly given that interest cover is over 9 times currently.  As
necessary capital expenditure normally approximates to 1-1.2x the depreciation
charge, the Company has concentrated 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 2001, acquisitions have been completed in advertising and
media investment management in the United States, the United Kingdom, South
Korea, Australia, Brazil, France, Portugal, Turkey and South Africa; in
information and consultancy in the United States, Germany and South Africa; in
public relations and public affairs in the United States and Argentina; in
branding and identity in the United Kingdom and Japan; in direct in the United
Kingdom, France and Hong Kong; and in interactive in the United States, the
United Kingdom, France and South Korea.



As announced by Tempus Group PLC ('Tempus') on 16 August 2001, the Company has
been in discussions with regard to making a cash offer for Tempus.  This
morning WPP has announced a cash offer of 555p (US$8.00) for the outstanding
shares of Tempus.



In addition to increasing the interim dividend by 20% to 1.44p per share, a
total of £16.4 million compared to £9.3 million last year, the Company has
continued its rolling share buy-back programme in the first half of the year
by repurchasing 9 million shares at an average price of £7.78 per share and
total cost of £70 million. The Company's objective remains to buy-back
approximately £150 million - £200 million of shares each year, currently
equivalent to 2-21/2% of the ordinary share capital.



wpp.com



The climate for interactive and digital activity has clearly changed compared
with the same period last year.  Clients have been more cautious in their
spending and sales cycles have lengthened.  However, from our point of view,
this has been more than compensated for by the ability to retain our best
people, the demise of start-up competitors and the desire of clients to
integrate interactive and digital with mainstream channels.  Medium term, we
continue to believe that technology will become an increasingly important part
of our activities.



We have seen increases in revenues compared with the same period last year at
OgilvyOne, Wunderman, Lightspeed, digital@JWT, Y&R2.1 and MindShare with flat
or declining revenues at our public relations and public affairs companies,
The Digital Edge and Millward Brown IntelliQuest. On a geographical basis we
have seen declines in organic like-for-like revenues in the United States, but
these have been more than compensated for by increases in Europe, Asia Pacific
and Latin America.



The value of our publicly traded interactive investments has declined during
the first half of the year, though we believe that the largest of our
investments - Syzygy and Concept! - are sound businesses, whose revenues and
margins stabilised in the second quarter.  We continue to review the value of
these investments to ensure that any permanent diminution in value is
reflected in the Group's results.  Our venture capital relationships - notably
with Wit Capital and Allegis Capital - continue to provide us with a stream of
interesting partners whilst some of our other non-quoted investments such as
Visible World continue to work effectively with our clients.  We have made two
investments this year; in Netomat (a sophisticated e-mail provider) and
MarketTools (providing technology infrastructure for market research over the
Web), but we continue to look for opportunities where investments could
enhance our core capabilities.



Client Developments in the First Half of 2001



Including associates, the Group currently employs over 67,000 full-time people
in over 1,300 offices in 102 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.  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 20% 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



Given the intensity of speculation about the worldwide economy, we deal here
with future prospects at some length.



Although economic conditions have been tough, the Group's financial
performance has continued to improve in the first half of 2001.  Even though
top-line growth has deteriorated against a budgeted like-for-like growth of
7%, the Company continues to gain market share in all geographic regions
including the United States, United Kingdom, Continental Europe, Asia Pacific
and Latin America.



Functionally, information and consultancy and advertising and media investment
management have been less affected and continued to improve their operating
profits and margins.  Public relations and public affairs, branding and
identity, healthcare and specialist communications have been most affected.



Prospects for revenue growth for the latter half of 2001 may be even more
difficult, although industry projections for advertising market growth in 2002
look slightly better than 2001. Despite these difficult conditions, marketing
services expenditures will probably continue to grow at a faster rate.  The
over-riding concern is that what has essentially up to now been a
business-to-business recession will spill over into the consumer sector.



Given these market conditions, 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.  Continued progress is being made in these areas.  For
example, on a reportable combined basis, the combined operating margins of
Ogilvy & Mather (including Cole & Weber and OgilvyOne), J Walter Thompson
Company, Y&R Advertising (including The Media Edge), Red Cell and MindShare
rose to 16.6% from 15.9% in the first half of 2001, compared to the same
period in 2000.



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.  This has become increasingly important
as economic activity stalls.



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 continues to concentrate on its objectives of improving operating
profits by 15-20% 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 20-33 1/3% of incremental revenue
to profit and growing revenue faster than industry averages and encouraging
co-operation among Group companies.



In addition to introducing greater flexibility into its cost structure, the
Group is competitively well positioned to weather current economic uncertainty
because of its stronger financial position, its geographic spread, its
consistent new business record and its competitive strength in information and
consultancy, public relations and public affairs, identity and branding,
healthcare and specialist communications - particularly as clients decide to
spend an increasing proportion of their marketing budgets on 'below-the-line'
activities.



The Group is in line to achieve its fifth margin plan target of 15.0% in 2001
and 15.5% in 2002.





For further information:


Sir Martin Sorrell                  Tel:  [phone]
Paul Richardson                     Tel:  [phone]
Feona McEwan





www.wppinvestor.com



Visuals available on www.newscast-online.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.


END


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