August 10, 2022
WPP raises net sales outlook again, but shares fall

WPP, the world’s largest advertising group, raised its annual net sales outlook on Friday after an upbeat second quarter.

Photo by Richard Board | Getty Images Entertainment | Getty Images

WPP raised its annual net sales outlook on Friday, boosted by strong customer spending in the second quarter, but shares in the world’s largest advertising group fell nearly 8% after last month’s continued climb.

The results come as investors and analysts anticipate how advertising will perform against a backdrop of high inflation and slowing global economic growth.

Shares of WPP were down 7.8% at 822.60 pence as of 0805 GMT on the London Stock Exchange. The stock has climbed 17.2% over the past month, compared to a 6% advance for the FTSE 100.

Britain’s WPP said similarly net sales from the technology sector grew 12% in the first half, helped by a series of new deals and the expansion of existing partnerships.

WPP, owner of Ogilvy, Gray and GroupM agencies, said the travel sector was also rebounding strongly, with 23% growth in the first half, although sales still remained below pre-pandemic levels.

Chief executive Mark Reid said he was not particularly concerned about a predicted slowdown in the UK, pointing to customer spending across industries and markets. The UK accounts for 13% of WPP’s total business.

“We don’t see any major impact on ad spend yet,” he said in an interview. “We are in very close contact with our customers on spending patterns and their investments and consumer spending have remained surprisingly well around the world.”

WPP now expects similar net sales to grow 6%-7% in 2022, up from an already advanced forecast of 5.5%-6.5%.

Forecasted growth was less than the 8.9% jump in its core net sales measure during the first half of the year — reflecting the slow pace of growth in the later half as revenues lower pass-through costs.

Last month, WPP rival Publicis raised its full-year guidance after beating expectations for first-half organic revenue growth and core profit margins.

Leave a Reply

Your email address will not be published.