In the first quarter of 2018, WPP’s like-for-like net sales were down just 0.1%, with the UK, Asia Pacific and Latin America up strongly, offset by declines in North America and Western Continental Europe.
In the first trading update since CEO Martin Sorrell resigned following an investigation into personal misconduct, the world’s largest advertising group beat analyst expectations, which had forecast a drop of around 1% due to lower spending from major clients and the threat from Google and Facebook.
Media investment management, public relations and public affairs and specialist communications performed well, with advertising and data investment management described as “difficult”.
Joint chief operating officers Mark Read and Andrew Scott, both running the company since Sorrell’s departure, with Read reportedly gunning for the job, said they would review WPP’s strategy and focus on growth.
In a statement, the joint CEOs said they were taking a “fresh look” at WPP’s strategy, developing a vision for the group that recognises the challenges and opportunities presented by the structural shifts in media industry, and “executing resolutely” against it. [advert position=”left”]
“Our priority is to focus on growth. We will proactively address the under-performing parts of our business and we need to ensure that our capital is deployed to those areas that will grow fastest and maximise shareholder value.”
The departure of Sorrell has prompted speculation that a new boss could sell off assets or restructure the group after it has struggled to match the better performances of other holding groups. In the last year WPP has cut its sales outlook three times.
However, executive chairman Roberto Quarta, who is running the business with Read and Scott on a interim basis, said: “We are pleased to announce the group’s first quarter trading update, which is in line with our expectations. Our guidance for 2018 remains unchanged.
“Mark Read and Andrew Scott are providing the stability and leadership WPP requires, but there is no standing still. They have my and the board’s full backing to review the strategy, to come back to us with recommendations, and to move forward decisively to implement our vision for the group.”
Meanwhile, The Financial Times has reported that CVC Capital Partners had approached WPP over a potential sale of Kantar.
