WPP like-for-like sales disappoint in first quarter but outlook remains positive

23rd Apr 2015 10:01

First quarter like-for-like sales growth from Sir Martin Sorrell's WPP was slightly slower than hoped, though profits and margin at the media megalith were "well above target" and the outlook statement was unchanged.After results from other ad agency giants had indicated good sales momentum, WPP faced tough comparative figures from the year before.Reported revenue were 8.3% higher in sterling terms at £2.78bn, but currency volatility meant they were 1.1% lower in dollar terms and up 20.9% in euros.Constant currency revenues were up 7.4%, with like-for-like revenue up 5.2% as all regions and business sectors - except data investment management - achieved growth.Particularly strong were the UK, Asia Pacific and Latin America, with the best verticals direct, digital and interactive and healthcare.Constant currency net sales rose 5.0%, with like-for-like net sales up only 2.5% due tom the scale of digital media purchases in the media investment management as well as direct costs in data investment management.Net new business of $1bn during the quarter was moderately down on the strong $1.28bn for the same period last year.The outlook was slightly adjusted to an increase in like-for-like revenue and net sales growth of "over 3%", with a headline net sales margin target of 0.3 margin points improvement on a constant currency basis.Broker Investec noted that the UK has slowed a bit versus last year, with Central Europe still slow. "The UK is in line, but all other areas slightly below where we thought."Westhouse noted that full year like-for-like revenue and net sales growth looked "well set" against its current target as does the margin outlook.