UK the one weak spot as WPP reports strong rise in revenues

Click to follow
The Independent Online

WPP, the advertising giant headed by Sir Martin Sorrell, posted a 5 per cent rise in like-for-like revenues in the first quarter but admitted it was concerned about the slowing UK market.

WPP, home to the agencies JWT and Young & Rubicam, reported double-digit revenue growth across all regions except the UK yesterday. Sir Martin said: "It's been a difficult market. The corporates are unwilling to make a significant commitment despite the fact that they're doing well. You've seen the results from ITV, from the newspapers."

He predicted that this summer's World Cup would lift like-for-like revenue growth in the UK from the current 1 per cent to 2-3 per cent for the year.

The company's US revenues rose almost 4 per cent on a like-for-like basis but the fastest-growing areas were the Middle East, Latin America and Asia Pacific which showed double-digit growth. The group enjoyed its strongest-ever new business billings for the first quarter at £1.3bn. It won new accounts from clients including Nokia, BT and Hitachi.

Overall revenues were up 23 per cent to £1.38bn in the quarter. Adjusted for currency fluctuations, turnover rose 18 per cent. Asia Pacific, Latin America, Africa and the Middle East posted total revenue growth of 26 per cent, while continental Europe was up 12 per cent, North America up nearly 17 per cent and the UK the slowest growing region at 9 per cent.

Sir Martin reiterated his interest in Synovate, the market-research arm of the media-buying group Aegis, adding that the French billionaire Vincent Bolloré, who has a 26 per cent stake in Aegis, calls the shots. "We're still interested. But Aegis is in the hands of Bolloré," he said.

WPP approached Aegis last year, as did the French advertising company Publicis Groupe. Both then pulled out. Under UK takeover rules, WPP and the private-equity group Hellman & Friedman have to wait until May before they can bid again.

WPP continues the investigation into its Italian operations after sacking its country manager Marco Benatti, and said it could lead to both criminal and civil proceedings. Two other WPP executives in Italy have also left the company. WPP has filed a suit against Mr Benatti in London for breach of contract.

The company is considering expanding its share buy-back programme, which is currently targeted at repurchasing 2 per cent of shares a year.