WPP growth strategy unaffected by Brexit as profits rise 15.8% to £690m

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Advertising giant WPP said Brexit will not hinder its growth strategy after reporting a 15.8% rise in pre-tax profit to £690 million in the first half of the year.

However, the company was stung by a £122 million writedown linked to its investment in analytics firm comScore. That compared with "exceptional gains" of £203 million during the same period last year, the group said. 

Like-for-like net sales grew 3.8% for the six months to June 30.

Headline pre-tax profit beat expectations, with analysts having forecast a 13% hike in pre-tax earnings to £755 million and a 3.2% rise in like-for-like net sales.

The company said the EU referendum vote had not hindered its growth strategy.

"Particularly, following Brexit, accelerated implementation of growth strategy continues, with revenue ratios for fast growth markets and new media raised from 35-40% to 40-45% over next four to five years," the report stated.

However, WPP's net assets took a hit from the weaker pound, which plunged in the wake of Brexit.

As a result, return on equity was down to 15.5% from 15.9% in the 12 months to June 30, compared with the same period last year.

WPP said it expects weaker figures for the remaining six months of the year, but suggested this had more to do with strong comparative performance in 2015.

Roddy Davidson, an analyst at Shore Capital Markets, called WPP's interim earnings results "robust". 

"We are encouraged by the positive trading performance and operational momentum revealed in this morning's results," Mr Davidson said. 

"We remain bullish on WPP's ability to capitalise on a solid medium-term outlook for global advertising spend - particularly in view of its concerted efforts to build an overweight exposure versus its peers to digital disciplines and faster growing regions, which should also help cushion regional variations and short term volatility in advertising spend," he added.