- World's largest ad company sees more growth from Olympics
- Brexit vote hasn't had significant impact on U.K. advertising
WPP Plc said first-quarter revenue rose as clients spent more in the U.S., U.K. and western Europe. The world’s largest advertising company forecast further increase this year, helped by the Summer Olympics in Rio and the U.S. presidential election.
WPP, which works for brands including Ford, Colgate and Marks & Spencer, said sales growth excluding currency swings and takeovers, called like-for-like growth, slowed to 5.1 percent during the period, from 5.2 percent a year earlier.
Chief Executive Officer Martin Sorrell has expanded into digital operations and made acquisitions in a bid to outpace rivals Publicis Groupe SA and Omnicom Group Inc. as spending for ads in traditional media has sputtered in recent years. WPP, the owner of agencies including Grey and Ogilvy & Mather, reiterated a forecast of like-for-like revenue growth of well over 3 percent this year, benefiting from the European soccer championship in France, the Olympics in Brazil and the U.S. election.
“If you’re looking for banana skins there aren’t any here,” said Alex DeGroote, a media analyst with Peel Hunt in London. “Against uncertainty from the Brexit vote and a possible Trump presidency, WPP has posted a confident outlook and is gaining good momentum.”
The shares declined 1.1 percent to 1,598 pence at 8:46 a.m. in London trading, giving the company a market value of about 20.7 billion pounds ($30 billion).
With less than two months to go before Britons decide whether to remain in the European Union, WPP clients in general are concerned about the vote and its possible effects on the economy and exchange rates, Sorrell said in an interview. But the prospect of Brexit hasn’t hurt ad spending, he said.
“Brexit has not had a significant impact on advertising spend as it has on other investment decisions,” Sorrell said. “If you’re thinking about investing in a factory you might defer, but ad campaigns are not being deferred.”
Revenue from operations in North America rose 6.9 percent to 1.19 billion pounds ($1.73 billion) while sales in the U.K. rose 4.7 percent. Business in Western Europe gained 4.4 percent. Net new business in the quarter was $1.78 billion, an increase of 78 percent.