Friday, 31 October 2008

WPP predicts "very tough" 2009 (IHT)

Reuters
Thursday, October 30, 2008
LONDON: WPP Group , the world's second-largest advertising firm, on Thursday predicted 2009 would be a very tough year after reporting third quarter revenue growth broadly in line with expectations.
The warning, including the acknowledgment that the Olympic Games had not produced the "Beijing Bounce" that was expected, follows similar dire predictions from other advertising groups such as Omnicom and Publicis .
WPP also said its headline operating margin was flat in the first nine months and said it would not now be easy to attain its margin target for 2008 of 15.5 percent.
WPP, whose agencies include JWT and Ogilvy & Mather, posted like-for-like revenue growth of 3 percent and reported revenue growth of 16.2 percent to 1.72 billion pounds.
Analysts had been expecting like-for-like revenue growth of 3.3 percent according to a Reuters poll of 7 analysts and reported revenues of 1.66 billion pounds.
WPP shares hit near 10-year lows in recent weeks on fears about the economic downturn and after Omnicom, the world's largest ad firm by market cap, reported retail and automotive clients beginning to push back and even cancel some ad plans.
"It is still likely that rates of like-for-like revenue growth, particularly by region, will vary significantly in 2009, as in 2008," the group said. "Whatever the pattern, it is not likely that our budget will reflect the Armageddon currently predicted by the fall in stock prices."
(Reporting by Kate Holton; Editing by David Cowell)







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