WPP Group, the world’s second largest agency group [third largest, if you believe Publicis, WAMN: 8-Mar-02], posted its first quarter results on Friday, with revenues plunging to £945.8 million ($1.368bn; €1.539bn) – a year-on-year fall of 9%.
Analysts had expected better, with a consensus downward forecast of 7%. As at 10.15 BST today, WPP shares were down by £0.145 to £7.62 on the London Stock Exchange. Sir Martin Sorrell, unusually reticent, remained opaque as to the group’s forward prospects for the remainder of 2002.
WPP’s US businesses were hardest hit with overall revenues down by seven per cent, contrasting with a rise in mainland Europe of better than 6%. Asia Pacific, Africa/Middle East and Latin America between them posted a revenue increase of 3%, while in the UK income rose by two per cent.
Accounting for the sharp decline stateside were the group’s public relations and public affairs agencies whose collective income took a 13% dive.
Worldwide new business billings for the quarter totalled £500m, reflecting the acquisition of several large new accounts. In general, however, advertising and media growth remained stagnant and the branding/identity, healthcare and specialist communications businesses sagged by over 2%. Bucking the trend, consultancy revenues rose by 6%.
In a statement accompanying the numbers WPP stuck to its usual investor-oriented mantra: “The group continues to focus on its key objectives of improving operating profits and margins, increasing cost flexibility (particularly in the areas of staff and property costs).
“[WPP continues] using free cash flow to enhance share owner value, continuing to develop the role of the parent company in adding value to our clients and people, developing our portfolio in high-revenue growth, geographical and functional areas and improving our creative quality and capabilities.”
Data sourced from: BrandRepublic (UK); additional content by WARC staff