WPP ups growth estimate as sales surge 12%

29th Oct 2010 07:26

Ad agency WPP upped like-for-like revenues by 4.1% in the first nine months of its current year as companies restarted advertising spending after the recession with traditional ad spending outstripping online. Total revenue rose by 6.3% to £6.69bn with third quarter sales up 12.2% to £2.3bn. Operating margins also improved over last year in the third quarter and WPP now expects to exceed the group's margin target of a 1.0 margin point improvement.Chief executive Sir Martin Sorell is also upbeat over the rest of this year and 2011. "Calendar 2010 looks set fair with a good fourth quarter in prospect, particularly as most of our clients budget on a calendar year basis. Forecasts of global GNP growth by the World Bank and others for 2011 seem to be at similar levels as in 2010, at around 4% or more." he said. "Preliminary indications are that our operating companies believe like-for-like revenue growth in 2011 may be more similar to 2010, despite the parent company's earlier feeling of 0-2% growth, " he added.Sorrell said the first nine months of 2010 saw a significant recovery in revenue growth and profitability, with sequential improvement in like-for-like revenue growth in all months bar one and in all quarters.The United States has recovered much more strongly than anticipated, with a dramatic turnaround from almost -6% in like-for-like revenue growth in the fourth quarter of 2009, to 4% in the first quarter of 2010, 8% in the second quarter and almost 10% in the third quarter. Traditional advertising has also recovered sharply, with an increasing trend in the first nine months, advertising and media investment management moving from almost -10%, to almost -1%, to 6% and to 9% in the same quarters.