WPP revenues beat market forecasts

WPP, the world's largest advertising group by sales, reported third-quarter revenues that beat analyst expectations and showed it was growing at a faster pace than its biggest rivals, Publicis and Omnicom.

Like-for-like revenues, which strip out the effect of currency movements and acquisitions and disposals, grew 7.6 per cent at WPP in the three months to the end of September. That compares with third-quarter growth of 6.5 per cent at Omnicom, 6.3 per cent at IPG, and 1 per cent at Publicis.

WPP, whose agencies include Grey and JWT, said that revenues reached £2.76bn in the third quarter, slightly ahead of consensus estimates of £2.65bn.

The strength of sterling against the dollar and the euro meant that on a reported basis, WPP's revenues were up just 3.1 per cent compared to the same period in 2013. On a constant currency basis, total revenues rose 10.6 per cent.

WPP stuck to its 2014 financial targets of like-for-like net sales growth of over 3 per cent, and an increase in its operating margin to net sales of 0.3 margin points on a constant currency basis.

But it added: "2014 looks likely to be another demanding year, as a strong United Kingdom pound and weak faster growth market currencies continue to take their toll on our reported results."

The group posted constant currency revenue growth in all regions and business sectors during the third quarter, with particularly strong growth in North America, the UK and emerging markets.

David Reynolds, analyst at Jefferies, said the results demonstrated that WPP "led the pack" of global advertising groups and added that it does not "make too much sense" that the company's shares trade at a discount to the peer group.

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