WPP trims full year forecast as Olympics, election revenues disappoint

WPP, the largest of the agency holding companies, has lowered its full-year outlook after not doing as well as expected from the Olympics, the U.S. presidential campaign and the European soccer championships. Shares opened 5% lower at 768.3 pence in London as the company said Thursday that it expected revenue growth between 2.5% and 3% […]

WPP, the largest of the agency holding companies, has lowered its full-year outlook after not doing as well as expected from the Olympics, the U.S. presidential campaign and the European soccer championships.

Shares opened 5% lower at 768.3 pence in London as the company said Thursday that it expected revenue growth between 2.5% and 3% for the year, down from the 3.5% target it set in August.

Third quarter revenue was up 1.6% to 2.5 billion pounds ($4 billion). The company did not disclose profit figures in the trading update.

“In some ways, the company is a proxy for the global economy and, even into 2013 WPP is managing down expectations,” said Richard Hunter, head of securities at Hargreaves Lansdown Stockbrokers.

“The reaction of the share price in early trade is testament to a market which is searching for corporate good news stories, but is finding them hard to locate,” Hunter said.

WPP said the three big events did support growth but not as much as expected, with money often switched from existing budgets, “particularly in the cases of the UEFA Championships and Olympics.”

Revenue fell by 0.4% in North America and 2.1% in western continental Europe, WPP said. Latin America was the best-performing region with growth of nearly 15%.

WPP said that in the U.S. it was worried about the government’s handling of debt and the looming “fiscal cliff” of expiring tax and spending legislation, which could result in automatic tax increases at the end of the year if politicians do not agree on new budget terms.

“Fears remain that whoever wins the presidential election, will be unable to deal with these issues given a dead-locked Congress,” the company said.

In Canada, WPP owns the Grey, Ogilvy & Mather, JWT, Hill & Knowlton, Kantar and Y&R groups of agencies. In 2011, North America accounted for approximately 35% of its global revenues.

Advertising Articles

Tim Hughes appointed managing director of Cairns O’Neil

Hughes will be responsible for strategy, implementation and quality control

DDB and MacLaren make executive changes at the top

David Leonard departs DDB Canada for MacLaren, Lance Saunders replaces him

Three Million Dogs prank pushes poop-scented perfume

Geoffrey Roche creates 30-second online video to promote "Fetch by Fetch"

Carte Blanche competition expands into Alberta

Creative competition now open to agencies in Calgary and Edmonton

Rossetto and Mackie leave DS+P

Three partners have left the agency in 2015

Sid Lee takes on ‘Made in Italy’ campaign

Toronto shop beats out three other unnamed agencies during agency review

Sobeys surprises customers with pop-up restaurant

Grocer aims to prove food from its take-out kitchen and fresh market could be fine dining

Air Canada makes content play with heartwarming video

Airline promotes Air Canada Foundation with six-minute video from former AOR Marketel

ZenithOptimedia revises global ad spend forecast downward

Canadian spending to grow 1.1% to US$11.2 million in 2015