After the announcement on Thursday that Britain has avoided a triple-dip recession with the economy expanding more than expected by 0.3 per cent in the first quarter, WPP’s results have added additional hope by confirming 2.1% growth in total revenues to £2.5bn.
The UK’s services sector helped to boost gross domestic product (GDP) growth to beat the 0.1% expected by analysts, according to figures from the Office for National Statistics. The sector rose 0.6% on the quarter.
WPP’s results are often seen as a key barometer for the marketing/advertising markets, and the latest figures show WPP is running ahead of its own budgets for the first quarter, with a performance in the UK that went against the market trend, growing revenues 3.7% to £318m.
The key North American market, which accounts for 35% of WPP’s total revenues, shrank 1% in the first quarter to £886m.
Elsewhere, Latin America and Asia Pacific grew strongest at 7.8% to £736m, leading WPP to reconfirm that it expects revenue growth for the full year to be about 3%.
Interestingly, WPP said that it has won $1.5bn (£970m) worth of new business from clients in the first quarter, down from $1.85bn in the same quarter last year.
WPP also confirmed that its advertising and media buying operation, which accounts for 41% of total group revenues grew at 3.9% to £1.03bn in the first quarter. Within this the media buying business grew revenues by 7.4% in the first quarter.
Unfortunately, WPP’s public relations and public affairs operations did not do so well, shrinking by 4.1% in the first quarter to £221m.
WPP confirmed that business was “particularly difficult” in North America, western continental Europe and Asia Pacific, but stronger in the UK and Latin America.
Last week, Publicis Groupe reported a first-quarter revenue falls of more than 6% in its European and UK operations.
With recovery likely to be a long and slow road, these figures hardly give cause for mass celebration, and it is yet to be seen if this growth can be sustained. However, growth, especially in the UK, is a positive sign and we need to take the positives in what will be a marathon slog.