WPP returns to revenue growth but still expects annual decline
WPP on Friday reported a jump in third-quarter like-for-like revenue but said it still expects to see a full-year decline.
The advertising and public relations giant booked a 1.8% rise in third quarter like-for-like revenue to £3.29bn, a return to growth following a 2% decline in the first half.
WPP said growth was driven by new contract wins from Mondelez and eBay, as well as the retention of major clients such as the US Marine Corps and Centrica.
Revenue improved across all geographies but the strongest growth came from Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe, where reported turnover climbed by 9% to £1.00bn.
Like-for-like net sales rose 0.7% in the three months to 30 September, an improvement on a second quarter drop of 1.4% and ahead of consensus expectations for a 0.6% decline.
However, a slower start to the year meant that net sales for the first nine months of the year were down by 1.1% at £7.92bn.
As a result, the company said it continues to expect an annual reduction in net sales of between 1.5% and 2.0% as it focuses on a return to sustainable growth in 2021.
Chief executive Mark Read said: "Our growth in Q3 is encouraging but we are focused on delivering these longer-term goals and know there will be twists and turns along the way. Our guidance for 2019 remains unchanged."
Analysts from Shore Capital said the update supported their view that the company's strategy is gaining traction at a time when many other industry constituents, such as Publicis, have produced weakened performances.
"Specifically, we like the group’s focus on simplifying operations; engendering greater internal cooperation; pursuing efficiencies; reducing debt; realising value from non-core operations and; generally enacting a more disciplined capital allocation policy - witness the disposal of a 60% stake in Kantar which is expected to complete early in 2020."
WPP shares were up 6.3% at 975.03p at 0950 BST.