WPP sales fall after major US client losses
London-based global advertising, PR and marketing giant WPP has reported a fall in first quarter revenue, after the firm lost major clients in the US late last year.
Like-for-like revenue fell 2.8 per cent to £2.92bn, but in the US sales slumped by 8.5 per cent after the ad company lost its biggest and longest-standing client, Ford Motor Company, and a number of other US clients in the pharmaceutical and consumer goods sectors.
WPP, which owns big name agencies such as Grey Global, JWT and Ogilvy & Mather, is also in the first year of a three year overhaul, led by CEO Mark Read, who took over from Sir Martin Sorrell last year.
Despite the fall in revenue, which was widely flagged and expected by analysts and investors, WPP reaffirmed its full year guidance.
"We continue to make good progress in implementing our three-year strategy to return WPP to sustainable growth”, said Read.
"As anticipated, our first quarter trading update reflects the impact of certain significant client losses in 2018, in particular in the United States.
“Although we face a challenging year, especially in the first half, I am encouraged by how well our people, agencies and clients are responding to our new strategic direction. Our expectations for the full year are unchanged.
Read also said that some of the firm’s newly formed agencies are showing initial signs of success in new business pitches. “The most recent merger, Wunderman Thompson, has followed VMLY&R's strong start by winning Duracell's international creative account. BCW has brought in nearly $70 million in new business in its first year.
"In March, five of our companies were recognised in Gartner's influential Magic Quadrant study of the world's leading and most forward-looking agencies, while WPP topped the WARC Effectiveness and Media 100 lists.
“This month, the Effie Index ranked us as the world's most effective communications company for the eighth successive year, demonstrating our enduring ability to deliver tangible business results for our clients.”
WPP’s shares were trading one per cent higher at £9.15 at the market open on Friday.
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