WPP cuts growth forecast second time after sales declined in first half
23 Aug 2017
Sir Martin Sorrell's WPP is seeing the worst year in a decade, with the world's largest advertising group being forced to cut growth forecasts for the second time after sales retreated in the first half.
WPP slashed its full-year growth forecast for revenues and net sales to between zero and 1 per cent after reporting a marked deterioration in the second quarter that missed market expectations by a significant margin.
WPP's share price was down 11 per cent in early trading today as company's financial performance and market outlook spooked investors.
According to Sorrell, among the UK's best-paid chief executives with a £48 million pay packet last year, there was unlikely to be any respite next year, considering factors including the performance of the Trump presidency.
''Trumponomics may well have resulted in an increase in the United States GDP growth rate … [but] the limitations of the new administration seem to be jeopardising the anti-regulatory, infrastructure and tax reduction programme that was promised,'' he said.
''The general atmosphere in relation to Trump and business has stuttered. The disbanding of the manufacturing council and the disbanding of the business council following Charlottesville, it is not as good as it was.''
WPP said that group performance had been "much tougher" for the first seven months of its financial year and blamed growing economic uncertainty, including due to a "rise of populism" in the UK and the US, and "bumpy" growth in Brazil, Russia and China.
The company now expects sales to grow 0-1 per cent as against previous forecasts of 2 per cent.
The reduced forecast will put WPP on course for its worse year since 2009 when like-for-like sales retreated 8.1 per cent during the global recession.
Total group revenue increased to £7.4 billion for the six months to June from £6.5 billion and pre -tax profit was up by 52.4 per cent to £779.2 million.