Sorrell bucks the market trend with WPP's buoyant advertising revenues

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The Independent Online

WPP, the world's largest advertising agency, has shrugged off a slowing worldwide advertising market to report buoyant third-quarter revenue figures with new business pouring in from top clients like Ford and Nike. The Olympic Games and the US presidential elections provided a boost that pushed aside growing fears of an advertising slowdown.

WPP, the world's largest advertising agency, has shrugged off a slowing worldwide advertising market to report buoyant third-quarter revenue figures with new business pouring in from top clients like Ford and Nike. The Olympic Games and the US presidential elections provided a boost that pushed aside growing fears of an advertising slowdown.

WPP repeated warnings that the world market for advertising would grow by around 6-7 per cent this year rather than the 7-8 per cent previously forecast. But although WPP, which owns J Walter Thompson and Ogilvy & Mather, admitted its organic current growth rates of 16 per cent could not continue, the group remained upbeat about prospects. "Clearly, it can't continue forever but we'll see when we get into next year," said Sir Martin Sorrell, chief executive.

The comments came as WPP admitted it was in takeover talks with two financial public relations consultancies. WPP confirmed that it is in what Sir Martin described as "early discussions" with Finsbury, a six-year-old firm whose clients include Merrill Lynch, Great Universal Stores and Williams. WPP is also talking to the Maitland Consultancy, which represents clients such as Unilever, BT and BG.

Reports have suggested Finsbury could be worth an initial £15m-£20m with earn-out clauses eventually taking the total to £50m. Sir Martin described these figures as "ludicrous".

Maitland has been talking to a number of potential partners to help grow its international business. It says a deal could be a joint venture rather than a full takeover.

Separately, analysts believe WPP has been forced to widen its search for a new chairman following a negative City reaction to its favoured candidate, Sir Christopher Lewinton, chairman of TI Group, the engineering company. Sir Martin refused to comment, apart from saying he hoped to fill the post in "the next couple of months".

It also thought that WPP has decided against giving the job to an executive at Young & Rubicam, the American advertising agency acquired by the British group earlier this month.

WPP saw third-quarter revenues rise by 26 per cent, of which 16 per cent came from existing operations. The UK was the weakest performer with revenues up by 11 per cent. This compared with a rise of 34 per cent in continental Europe and 19 per cent in North America.

Lorna Tilbian at WestLB Panmure described the figures as "as good as it gets". She upgraded her full-year profit forecast from £350m to £360m.

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