26th Oct 2015 10:28
LONDON (Alliance News) -WPP PLC on Monday reported a rise in revenue in the third quarter of 2015, and said that whilst it is still in the process of reviewing its forecasts, early indications are that its revenue and net sales in the fourth quarter will be ahead of the first nine months.
The media-buying giant said its total revenue rose 5.9% to GBP2.93 billion in the quarter to end-September from GBP2.76 billion, and up 7.9% at constant exchange rates. WPP said that in constant currency it saw revenue growth in all regions and business sectors.
This takes WPP's global revenue growth for the first nine months to 6.5%, or 6.9% at constant currency.
WPP said its third quarter like-for-like sales growth, meaning stripping out acquisitions and disposals and at constant exchange rates, was stronger than in the first half, partly due to easier comparatives.
In North America, constant currency revenue growth was 8.6% in the quarter from a year before, slightly lower than the second quarter but better than the first half as a whole. On a like-for-like basis, growth was 6.8% in the region.
In the UK, like-for-like revenue growth was 1.1%. This was slower than in the second quarter, as parts of the advertising and media investment management, data investment management and healthcare business softened, WPP said.
Western Continental Europe saw like-for-like revenue up 6.1%, as there was "considerable improvement" in the quarter despite being "relatively more difficult from a macro economic point of view".
In Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe like-for-like revenue was up 2.9%, WPP said, boosted by improvements in Australia, China and the Philippines, which partly offset a weaker performance in Indonesia and Malaysia.
Operating profits and operating margins were "well in line with target" in the first nine months, WPP said. Nine-month operating margin was up 0.3 margin point, or 0.5 margin point in constant currency, and it is targeting a rise of 0.3 margin point in constant currency for the full year.
WPP said that it is early in its 2016 three-year planning and budget cycles, but that "at this point in time the pattern for next year looks very similar to 2015, but with a boost from maxi-quadrennial events."
In terms of its fourth quarter, the company said its forecasts are "characteristically cautious", however early indications show that revenue and net sales will show higher growth than in the first nine months against weaker comparatives, with an improvement in Asia Pacific, Latin America, and Africa and the Middle East. Additionally, WPP noted concerns about growth rates continuing to slow in China in the latter part of 2015.
Additionally, WPP highlighted continued caution amongst clients as they focus on costs rather than review growth, which it does not expect to change in the last quarter of 2015 or in 2016.
Shares in WPP were down 2.6% at 1,442.00 pence, the weakest performer in the FTSE 100.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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