WPP's £500m hit

WPP, Sir Martin Sorrell's marketing services giant, is to take a hit of as much as £500m from the falling values of companies that it has bought in the past few years.

The group will not write down the value of any of its major brands, such as J Walter Thompson, Ogilvy or Young & Rubicam, which are valued at £950m. However, it has another £4.4bn of goodwill acquired through scores of smaller purchases.

It is expected that WPP will write off at least 10 per cent of the value of this goodwill, leading to a one-off charge of over £500m. This "impairment" charge will be announ- ced with the group's full-year figures, which are expected to show a 20 per cent drop in profits to under £400m.

Sir Martin will warn that 2003 will be tough but he will indicate that he can see some hope for recovery in the advertising industry in 2004.