WPP exceeds targets with Q1 revenues up 3.6%

WPP saw revenues grow 3.6% on a constant currency basis in the first three months of 2017- but like-for-like growth at the world's biggest advertising company was the lowest in two years.

WPP founder and chief executive Sir Martin Sorrell
WPP founder and chief executive Sir Martin Sorrell

In sterling, WPP’s revenues shot up 16.9% to £3.6bn – though this was in large part due to the collapse in the UK’s currency following last June’s Brexit referendum.

WPP said that performance in the quarter was ahead of budget, thanks to a better than expected performance in all sectors, apart from data investment management. It has forecast like-for-like revenue growth in 2017 of around 2%.

The UK performed strongly, with revenue up 4.8% to £473m, and net sales up 5.6% to £396m. Western Europe was also healthy, with revenue up 6.8% on a constant currency basis to £727m, and net sales up 6.1% to £597m. But in North America, revenue fell 0.2% to £1.38bn, with net sales up 2.1% to £1.2bn.

Like-for-like revenue growth in the quarter, taking out the impact of acquisitions, was just 0.2%, down from 0.5% the previous quarter. The figure varied from 3.2% to 6.7% for the seven quarters before that.

Like-for-like growth was strong in the UK and western Europe, but flat in APAC, Latin America, Africa, the Middle East and central and eastern Europe, and negative in North America.

In terms of business sectors, advertising and media investment management had the healthiest quarter overall, with net sales up 7.7% on a constant basis – though in like-for-likes, the sector was down 0.3%.

Two other sectors – public relations and public affairs, and branding & identity, healthcare and specialist communications (including digital, ecommerce & shopper marketing) – grew both in constant and like-for-like terms. But the fourth, data investment management, saw declines in both constant and like-for-like terms.

WPP completed 14 acquisitions in the first quarter, of which it said seven were in new markets, ten in the areas of quantitative and digital, and four having both of these attributes, which represent a strategic focus for the business.

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