The Olympics has boosted advertising expenditure

Pre-tax profits rose 15% to �176.3m in the six months to June as turnover rose 13% to �2bn at constant exchange rates.

WPP said growth had been spurred by major events such as The Olympics, Euro 2004 and the US Presidential election.

The company said the outlook for 2005 was positive although it said that it had concerns about medium term prospects for the US economy.

2004 has seen a significant improvement in activity particularly when compared to 2001 and 2002 WPP Check WPP's share price

WPP, the world's third largest advertising services company, owns the J Walter Thompson and Young & Rubicam advertising agencies.

WPP said business had been strong across all its operations with revenues rising 11% in North America and 8% in Continental Europe.

US concerns

"2004 has seen a significant improvement in activity particularly when compared to 2001 and 2002," the company said in a statement.

However, it warned about prospects for the US economy after November's Presidential election.

"Whoever is elected will have to deal with a substantial fiscal deficit, a weak dollar and risks of inflation, not aided by high oil and commodity prices.

"Higher interest rates may slow the US economy, which continues to be the primary driver of the global economy."

But chief executive Sir Martin Sorrell's comments that the firm is still conducting due diligence regarding a potential offer for Grey Global - the US's third largest advertising agency left traders unimpressed.

Brokers were unimpressed with the firm's guarded outlook, and predicted WPP shares will underperform in coming months.