WPP has today unveiled its AGM trading update for the first four months, revealing that reported revenues were up 6.7 per cent at £3.445bn, while on a like-for-like basis revenues were up 2.3 per cent compared with the same period last year.
For the remained of the year, WPP will look to grow revenues and gross margin faster than the industry average; having made 15 acquisitions so far in the year.
Sir Martin Sorrell explained: “As in the first quarter, the pattern of revenue growth in 2013 is generally similar to the final quarter of 2012, with some improvement in April and with continuing growth across all geographies and all sectors, except public relations and public affairs.
“On a like-for-like basis, advertising and media investment management and branding & identity, healthcare and specialist communications (including direct, digital and interactive), as in the final quarter of 2012 and first quarter of 2013, continued to be the strongest sectors, with consumer insight revenues and gross margin improving further.
“The pattern of revenue growth seen in 2012, with slower growth in the mature markets of the United States and Western Continental Europe, has continued, although the United Kingdom continued to “buck” market trends, growing strongly. The faster growing markets of Asia Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe continued to be the strongest, as seen in the first quarter, followed by the United Kingdom. We have just received the “flash” revenue figures for May, which indicate a similar overall like-for-like pattern to the first four months of the year.”
The AGM notes predict that 2014 looks a better prospect that this year, with current worries starting to build about what may happen to financial markets when loose monetary policy, quantitative easing, for example, in the USA, UK and Japan is reversed and interest rates start to rise, as they must do at some point in time.
So far, it is predicted that GDP growth for 2014 will be around four per cent, with Sorrell saying “if advertising remains at the same percentage of GDP, which looks at least likely, the prospects for the communications industry are set fair.”
Adding “My final observation may seem a perverse one: but companies such as WPP, while finding lengthy periods of economic downturn deeply painful, also have cause to be grateful to them.”