New client wins drive WPP to quarterly growth
Advertising giant WPP has returned to quarterly sales growth for the first time in a year as it was buoyed by new client wins.
The company reported organic growth of 0.7% in the third quarter, as a strong performance in Europe was offset by decline in the US market. However, analysts had previously predicted decline for the period.
Meanwhile, like-for-like revenues for the three months to September increased by 1.9% to £3.29 billion.
WPP said it was boosted by major client wins in the quarter such as new deals to work with eBay and Mondelez.
Nevertheless, the company held firm on its financial expectations for the full year, stating that it expects to post a decline in organic sales of between 1.5% and 2%.
Mark Read, chief executive officer of the business, said the figures were “encouraging” and said it made progress over a number of fronts after a shift in strategy last year.
After taking leadership of the firm following Sir Martin Sorrell’s exit, Mr Read has pushed to simplify the company’s varied portfolio and slim down the global holding group.
Yesterday, WPP shareholders approved plans to sell 60% of the company’s Kantar division to Bain Capital, in a move which values the business at around £3.2 billion.
It said the move will help towards its simplification and will boost its balance sheet.
Mr Read said: “WPP’s performance in the third quarter is another important step in the strategy we outlined in December 2018 to return the company to sustainable growth in line with our peers in 2021.
“Our growth in quarter three is encouraging but we are focused on delivering these longer-term goals and know there will be twists and turns along the way.
“We have cemented our position as the largest partner to the world’s leading technology firms and, most importantly, the work we do continues to be highly valued by our clients as we adapt to their changing needs in a dynamic marketplace.”