WPP upbeat despite revenue concerns

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The Independent Online

WPP Group, the world's second-largest advertising and marketing group, disappointed investors by reporting a 5 per cent rise in third-quarter revenue on a like-for-like basis, approximately 10 per cent below market forecasts.

The company, which owns over 140 agencies worldwide, including Young & Rubicam, Ogilvy & Mather and J Walter Thompson, reported third-quarter revenues of £1.48bn and told investors that despite the shortfall it remains confident of hitting its full-year targets.

The company said: "Despite concerns about the impact of the recent liquidity crisis, there has been little or any effect on spending levels across the board."

The company added that it expects a strong 2008, backed by the Beijing Olympics and US presidential elections. However, 2009 could be a tougher year and advertising spend could drop sharply, in particular in the US, where the company believes that a new administration could be tempted to clear out any "politically unpleasant medicine" early in what could be an eight-year cycle.

The results mean that WPP has reported revenues of £4.4bn for the first nine months of the year, and the disappointing third-quarter numbers resulted in the shares closing lower in yesterday's trade, down 29p at 665p.

Sir Martin Sorrell, WPP's chief executive, also used the trading update to criticise the reforms on capital gains tax announced by the Chancellor, Alistair Darling, in the pre-Budget report.