Advertising group WPP sticks to outlook despite downturn

WPP, the advertising group run by high-profile executive Martin Sorrell, posted a slightly lower-than-expected 3 per cent quarterly sales rise, reflecting growing concerns over geopolitical tensions and a slowdown in the global economy.

The British group, owner of the JWT and Ogilvy & Mather agencies, reiterated its full-year sales target however and outperformed its major rivals due to its broad geographical reach and strong presence in digital advertising.

“All in all, whilst clients may be more confident than they were in September 2008, they broadly remain unwilling to take further risks, particularly given multiple geopolitical flash points,” the company said in a statement today.

WPP, whose chief executive Sorrell is a frequent commentator on business issues such as taxation, posted a 3 per cent rise in like-for-like net sales, slightly below the consensus of 3.3 per cent and a first half rise of 4.1 per cent.

Revenue - which the group distinguishes from net sales due to the way it books some income - was up 3.1 per cent in sterling terms at £2.76 billion and on a constant currency basis was up 10.6 per cent.

WPP, which has more than 179,000 staff in 111 countries, said it expected a slowdown in the fourth quarter, after protests in Hong Kong, the spread of Ebola and the rise of Islamic State in Syria and Iraq knocked corporate confidence and deterred companies from spending freely.

WPP also faced tough comparatives in the third quarter and said it had seen some slowdown in North America and Britain, partly offset by a significant increase in western continental Europe.

Reuters