26th Apr 2019 07:47
LONDON (Alliance News) - Advertising giant WPP PLC is making good progress, it said on Friday, despite sluggish performance in North America.
WPP's revenue for the first quarter of 2019 rose 0.9% at reported currency to GBP3.59 billion. Excluding currency movements, revenue was down 0.6%, and like-for-like it fell 1.3%.
Minus pass-through costs, revenue declined 0.7%, or 2.3% constant currency, to GBP2.93 billion, and slipped 2.8% on like-for-like basis.
Like-for-like revenue minus pass-through costs in North America fell 8.5%, making it WPP's weakest performing region, due to continued losses among automotive, pharmaceutical, and fast-moving consumer goods clients.
UK like-for-like revenue less pass-through costs fell 0.9%, slightly worse than the year ago period, while the figure fell 0.3% in Western Continental Europe.
WPP's like-for-like revenue less pass-through costs elsewhere rose 2.3%, with strong growth in the Latin America, Central & Eastern Europe, and South East Asia segments.
"We continue to make good progress in implementing our three-year strategy to return WPP to sustainable growth," said Chief Executive Mark Read.
"As anticipated, our first quarter trading update reflects the impact of certain significant client losses in 2018, in particular in the US," he continued.
Net debt fell by GBP712 million, reaching GBP4.16 billion on average during the quarter, while WPP also said its sale of Kantar Group stake is progressing on track.
WPP is selling an undisclosed stake in market research business Kantar, with a high level of interest from "high quality" potential partners.
"Although we face a challenging year, especially in the first half, I am encouraged by how well our people, agencies and clients are responding to our new strategic direction. Our expectations for the full year are unchanged."
WPP has reiterated guidance for 2019, estimating a fall in like-for-like less pass-through costs revenue of 1.5% to 2.0%. In 2018, the figure fell 0.4% to GBP12.83 billion.
WPP also anticipates its annual headline operating margin to revenue less pass-through costs down around 1.0 margin point at constant currency.
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