WPP, the world's largest advertising group by revenue, posted first half like-for-like sales at the low end of forecasts but said it expected a better second half due to job cuts and easier comparatives.
The company, which moved its corporate headquarters to Ireland in protest at Britain’s corporation tax regime reported said first-half headline earnings before interest, depreciation and amortisation (EBITDA) fell 14.3 per cent to £455.7 million ($745 million), on revenues up 28 per cent to £4.3 billion, in line with forecasts.
Chief executive Martin Sorrell said trading had improved in July from the fall in sales of over 10 per cent in the second quarter.
Global advertising sector revenues have been battered this year as clients have cut spending during the downturn.
The group expects improved second-half profitability due to improving comparatives and after cutting headcount by almost 6 per cent on the year.
Mr Sorrell said it would be 2010 before the group saw positive revenue growth. He also said WPP was happy with its debt profile, and did not need to raise equity even if ratings agencies downgraded the group.
WPP said its headline operating margin before severance and one-off costs, another key metric for the industry, fell to 10 per cent.
Mr Sorrell said the company had made provisions for a similar rate of severance in the second half.
The group said there was still little evidence of stronger order-books or investments despite chief executives feeling better about the general economic environment but said things would look better partly due to easier comparatives.
The interim dividend was unchanged at 5.19 pence. The group held its first agm in Dublin in June.
Reuters