WPP beats forecasts with 5% revenue growth Sir Martin Sorrells WPP has comfortably beaten investor expectations, reporting revenue growth up 5% in the third quarter. The worlds largest marketing services group – at least until rivals Publicis Groupe and Omnicom complete their merger – reported like-for-like revenue growth up 5% to £2.68bn in the three months to the end of September. Numis said that the growth rate was impressive and well beyond [market] expectations – it had predicted 3.4% – while UBS, which had a target of 4% to 4.5%, said it was sector-leading growth. The surge, more than double WPPs 2.4% growth across the first half, easily outpaces that of rivals that have reported their quarterly updates recently. US-group Omnicom reported 4.1% like-for-like growth for the third quarter, Frances Publicis Groupe 3.5% and Interpublic 2.8%. WPPs UK operation, which accounts for 13% of total revenues, increased its like-for-like revenues by 8.1% to £352m in the third quarter. This was fuelled by WPPs dominant media buying operation, Group M, which showed double-digit growth. North America, the most important region at almost £1bn revenues and 35% of WPPs total, grew 4.6% year on year. Fast-growing markets including Asia Pacific and Latin America grew 5.8% in the third quarter to £791m, but western continental Europe managed just 2.8% growth. WPPs global engine is driven by its advertising and media investment management business – effectively the operation that makes ads and buys ad space – which grew 6.6% to £1.08bn. The division, which is mostly fuelled by the global media buying operation, accounts for 41% of WPPs total revenues. The only discipline to fall back was PR and public affairs – WPP owns agencies including Hill & Knowlton and Cohn & Wolfe – which shrank by 0.9% to £229m in the quarter. Sorrell said that the company had outperformed rivals due to factors including geographically superior positions in new markets as well as functional positions in new media and data investment management such as analytics. WPP said that full-year revenue growth is expected to be over 3%. The company said it employed 117,852 staff, excluding those in associate companies of which WPP owns less than 50%.
Posted on: Thu, 24 Oct 2013 07:49:38 +0000
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