Disappointing growth forecast sees WPP’s shares plummet

WPP’s share price fell almost 12% on Wednesday after Sir Martin Sorrell’s advertising group reported a cut in client spending for the first seven months of its financial year.

WPP revised its sales growth down from forecasts of 2% to just 0-1%, citing particular pressure in the FMCG or packaged goods sector and weak trading in America.

The revised forecast is the worst since the global recession in 2009 when like-for-like sales fell by 8.1%.

However, the UK’s like-for-like revenue was up 5.8% in the second quarter making it the strongest performing region, and an improvement on the first quarter growth of 3.2%.

“The advertising giant cited falling demand from its clients as a reason for the reduced revenue forecast,” said CMC Markets analyst David Madden. “This is the second time the sale forecast has been trimmed this year, and that is a warning sign to traders, as it could be the start of a trend.

“In 2017, the share price has created a series of lower lows and lower highs, which is a worrying sign.”

Despite the slowdown, total group revenue for the first six months of the year rose to £7.4bn from £6.5bn.

Pre-tax profit grew by 52.4% to £779m.