WPP slashes revenue forecast as clients cut spend

WPP shares have crashed more than 10% after the world's biggest ad group cut its revenue forecast and warned growth was behind budget.

Sir Martin Sorrell: 'We have to weather the storm'
Sir Martin Sorrell: 'We have to weather the storm'

Annual revenues are now forecast to grow between only zero and 1%.

"For the short-term, we have to weather the storm," Sir Martin Sorrell, the chief executive, said in a statement.

Global billings dropped 4.7% and net sales fell 0.5% on a like-for-like basis in the first half of the year compared to 2016.

In a worrying development, conditions worsened in July as net sales dived 2.6%.

"All sectors were down, with advertising and media investment management and data investment management the most affected," the company said.

WPP had already revised its second quarter forecast and July was "behind budget and the quarter two revised forecast".

Investors took fright, even though the impact of last year’s loss of two big media accounts, AT&T and Volkswagen, had been well flagged all year.

WPP said revenues were not badly affected by June’s cyber attack.

The shares fell 159p to £14.31 and have dropped by a quarter since hitting £19.21 in March.

WPP’s rivals, Interpublic and Dentsu Aegis Network, have already warned at their half-year results that growth was slower than expected.

Ian Whittaker, analyst at investment bank Liberum, said WPP’s performance was "likely to disappoint" but forecast: "2018 should see an uptick from net new business wins."

Topics

Become a member of Campaign from just £45 a quarter

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.co.uk ,plus get exclusive discounts to Campaign events

Become a member

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now

Partner content

Share

1 Why creative people have lost their way

What better way to kick off Campaign's relaunch than with another think piece on the current failings of our industry, written by an embittered, pretentious creative who misses "the way things used to be"...

Share

1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).