WPP sees recovery signs
SIR Martin Sorrell's WPP saw a slight recovery in its core advertising business in the first quarter of this year but a delayed reaction from below-the-line businesses such as public relations and sports marketing kept the group in check.
In the three months to the end of March WPP's total revenues fell by 2%, or 1% adjusted for currency changes, to £945.8m. But on a like-for-like basis - taking out such acquisitions as Britain's Tempus advertising agency - revenues fell by 9% in the first quarter, exactly the same drop as suffered in the fourth quarter of 2001 in the wake of the 11 September terrorist attacks on the US. WPP said it was concentrating on operating costs and margins and focusing particularly on staff and property costs.
Geographically, North America showed the least signs of improvement with revenues down by 7%. In Europe, Britain produced a near 2% advance while the Continent rose by 6%. Asia Pacific, Latin America, Africa and the Middle East rose by just over 3%.
New business billings increased by more than the market had expected at £500m with major new clients including pizza chain Domino's and drugs giant Novartis.
Advertising and media investment management was flat with revenues at £426.5 million while information and consultancy rose by 6.5% to £143m. Public relations and affairs showed the largest fall, 13%, to £114m and branding and specialist communications slid 2% to £261m.
