WPP results show improvement with UK growth surge

WPP Group has reported worldwide revenues up 1.8% for the first five months of the year in its latest trading statement, with the UK seeing 4% growth in the past two months.

Sir Martin Sorrell
Sir Martin Sorrell

The five month trading figures have been issued at the latest WPP annual general meeting today (29 June).

The marketing services company, headed by CEO Sir Martin Sorrell (pictured), cites like-for-like revenues up 2.2% and says that its revised first quarter forecasts show that, on a like-for-like basis, the improvement in revenues seen in the first five months will continue for the balance of year. It expects full year like-for-like revenue growth of around 2%.

WPP chairman Philip Lader said: “Year-to-year comparisons continue to improve, with like-for-like revenue growth showing sequential improvements for the first five months, and with May revenue growth of well over 5%.”

He added that the United States has continued to show “remarkably strong” like-for-like growth and that the United Kingdom has also shown “continuous improvement” this year, with revenue growth in both April and May well over 4%.

However, he said that cautioun had to be maintained. “There are fears of Eurozone contagion from Greece, Portugal, Spain and Ireland to other parts of Europe; fears of the impact of the UK Government’s new austerity programmes; fears of similar austerity programmes in France and Italy; and fears of the withdrawal of fiscal stimulus in Germany. Perhaps most important of all, fears for US growth later this year.”

Asia-Pacific growth has been driven by Greater China, India, Singapore and Japan. Revenue growth in mainland China is over 7% in the first five months, with India even stronger at almost 12%.

All the different communications services sectors, other than advertising and media planning and buying, are showing similar like-for-like revenue growth at 2.0% or just over, with advertising and media investment management slightly lower at 1.7%.

The latter have seen “a marked recovery” in the last two months, with combined growth of almost 5% and year to date growth of 1.7%, compared with -0.9% in the first quarter.

The global advertising business returned to growth in May, the first time since November 2008.

Lader summed up saying: “It has been a pretty bumpy ride – and it is not over yet. Nor, in one sense, will it ever be over. There is never a time in a competitive market such as ours when our companies can sit back and relax and let the business roll in. To continue to win means continuing to compete – every day, all the time.

“But one of the very few benefits of the turbulent times we live in is the reminder they provide of an easily forgotten basic truth: if you do what you are paid to do outstandingly well, everything else will follow.”

UK Chancellor George Osborne has just indicated he will alter tax rules to encourage UK companies to base their headquarters back in the territory and singled out WPP as one he would like to see return.

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