WPP growth hits 10-year high

29 October 2010

LONDON: WPP has reported strong figures for Q3, with revenues hitting £2.25bn ($3,6bn, €2.6bn), 7.5% up on last year.

The holding company also reported growth of 9.3% in the US for the three-month period.

WPP's overall revenue growth for the quarter is  its highest since 2000.

In Q4, strong demand from the developing world is also likely to offset the absence of adspend stimulus from major events such as the Football World Cup and Shanghai Expo, which were held earlier in 2010.

Speaking earlier this week, Sir Martin Sorrell, ceo of WPP, was upbeat on the holding company's prospects.

"We've seen sequential improvement – month by month improvement – through to September with the exception of June," he said.

When asked about WPP's future prospects, Sorrell was similarly positive, saying conditions are "pretty set fair for the rest of the year".

The news follows positive growth results from other advertising giants over recent months.

The world's third-largest advertising group, Publicis, achieved an estimated $2.7bn worth of new business during the third quarter.

Organic revenue growth hit 9.2% for the quarter, beating WPP's results.

Sorrell anticipated "some rebalancing next year", recognising the US growth during Q3 would be difficult to replicate.

This caution is reflected by the views of analysts at Jefferies.

A recent note to clients warned: "Continuing unemployment issues and the election uncertainty in the US suggest a more challenging environment in the year-end and possible in to 2011.

Jefferies calculate that WPP's third quarter new business wins from AB Inbev, BhartiAirtel, Reliance Communications and GSK have contributed to net new business worth something akin to $1.3bn.

To rebalance this year's strong US performance, Sorrell told Reuters that, in 2011, WPP will be looking towards Asia, the Middle East and Africa and Latin America for the highest growth rates.

Data sourced from FT.Com and Reuters; additional content by Warc staff