News from Martin Sorrell, that March and April of this year are stronger than anticipated, was taken by dealers to mean WPP is likely to have results coming in above forecast.
Speaking at a Merrill Lynch conference yesterday, Martin Sorrell said March and April were stronger than the first quarter average as momentum built. He reiterated comments made in April that he expects to set margin targets of 14%-15% for 2005 and 15%-plus for 2006.
New business wins have been strong, as HSBC awarded WPP its $600 million global advertising and marketing business. Miller Brewing, Toys R Us and Novartis are also recent wins and WPP is believed to be down to the last two for the $400 million Samsung account.
His comments echo reports earlier this week, which suggest the US advertising recovery is beating predictions with spend up in the first quarter by 9.6%, as it starts to reap the benefits of the US presidential elections and the upcoming Olympic Games.
This morning, Merrill Lynch reported WPP is clearly seeing the benefits of the past few year’s cost initiatives, new business recovery and organic sales growth. 3-4% global growth is anticipated, with the US and emerging markets looking strong but ‘old’ Europe and UK still slow. Merrill Lynch predicts 2005 growth could be around 1% slower due to drop out of 2004 ‘one-offs’ and tougher fiscal and monetary conditions.
In April, WPP reported first quarter revenues were up by almost 6%, including a 12% rise in the UK(see WPP Revenue Up By 6%).
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