Great expectations

28 October 2003 By Fiona Maharg-Bravo

WPP may be climbing out the bath in 2004, but Sir Martin Sorrell is already talking down prospects for 2005. The advertising chief executive may be right, but shareholders shouldn t take his comments too literally.

This content is for Subscribers only

Context News

WPP said it was climbing further out of the bath, according to the advertising group's guidance on future prospects. Referring back to the prediction of its chief executive, Sir Martin Sorrell, WPP said the advertising industry still faced a bathshaped recession. The group again repeated its confidence in a healthy 2004 due to the US presidential election, US government spending, the Athens Olympics and the European football championships. However, the group warned that government spending on both sides of the Atlantic might lead to higher inflation in 2005.

WPP reported a 2% increase in likeforlike revenues in the first nine months of 2003, up 1% for the third quarter to just over £1bn. Revenue continued its muted growth in the United States, while the UK and parts of continental Europe showed continued signs of weakness. The rest of the world continues to deliver steady growth.

The group won net new business of £400m in the third quarter, making a total of £1.7bn in the first nine months. It said the operating margin will be stronger in the second half than in the first and in line with the revised margin target of at least 13% following the acquisition of Cordiant.

The company's objective remains to buy back £100m – £150m of shares a year, but it has only bought back £20m so far.

Context News

Email a friend

Please complete the form below.

Required fields *