WPP’s Sir Martin Sorrell warns over Ukraine tensions

Advertising group reported a 1.5% rise in first-half pre-tax profit to £532 million

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The Independent Online

WPP’s boss Sir Martin Sorrell has warned geopolitical threats in the Middle East and the dispute between Ukraine and Russia provide a threat to the global economy.

Sorrell said that, despite a strong first half in its Russian arm, WPP’s profits would be hit in the second half by sanctions imposed on Russia by the US and EU.

The world's largest advertising group reported a 1.5 per cent rise in first-half pre-tax profit to £532 million and reaffirmed its net sales operating margin improvement target for the year of 0.3 percentage points in constant currency.

However Sorrell said: "The strength of sterling has ravaged... our revenue figures and profits figures on a reported basis."

The group, which was created by Martin Sorrell and employs almost 175,000 people in 3,000 offices around the world, said its net sales margin for the first half was 13 per cent.

WPP, which has agencies including Ogilvy Group and JWT, lowered its margin guidance for the 2014 year in February due to competition in the industry.

It has, however, gained extra work in recent months from rivals Omnicom and Publicis, as they were engaged in merger talks which broke down.

WPP announced a 2.7 per cent increase in reported revenue to £5.47 billion.