WPP To Beat Forecasts As Recovery Gathers Pace
Sir Martin Sorrell’s revelation that revenues for March and April of this year have been stronger than anticipated has been taken by dealers to mean that WPP’s forthcoming financial results are likely to be higher than forecast.
Speaking at a Merrill Lynch conference recently, the WPP chief executive said that March and April were stronger than the first quarter average as the advertising recovery gained momentum. He reiterated comments made in April that he expects to set margin targets of 14% to 15% for 2005 and 15% plus for 2006.
New business wins have been particularly strong recently, 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.
Sorrell’s 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.
According to Merrill Lynch WPP is clearly seeing the benefits of the past few years’ 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.
WPP: 020 7408 2204 www.wpp.com
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Earlier this month Sorrell sounded an uncharacteristically optimistic note on the prospect of a global advertising recovery when he unveiled the company’s annual report. He told shareholders that WPP, which owns J Walter Thompson, Ogilvy & Mather and Young & Rubicam, would strengthen its business this year and show signs of further improvement next year (see Sorrell Positive On Global Advertising Recovery).