WPP third quarter revenues rise to GBP2.9bn

WPP has reported a healthy rise in revenue for the third quarter, and expects an even better fourth quarter.

The FTSE 100 PR and advertising firm released its third quarter trading update on Monday.

It reported revenues for the three months to 30 September were up 5.9% to £2.927bn, however at a constant exchange rate the company’s revenue rose 7.9%.

Net sales for the quarter were up 4.2% to £2.518bn driven by particularly strong growth in advertising and media investment management as well as direct, digital and interactive and specialist communications.

It also highlighted net new business of just under £2bn in the period and that for the year to date, operating profits are well ahead of 2014.

However average net debt for the first nine months increased by £403m to £3.436bn, reflecting the company’s significant investment in acquisitions and share repurchases.

WPP said that while its forecasts are characteristically cautious, it expects revenue and net sales in the fourth quarter will show higher growth than the first nine months.

In a note to investors, Investec analysts Steve Liechti and Richard Holroyd said while the third quarter was “not as good as hoped”, it kept its full-year guidance unchanged for like-for-like 3% growth.

“Add – we like the growth shift to digital/emerging markets (EM) and cash generation, but see some unhelpful near-term global GDP uncertainty, e.g. EM macro/foreign exchange.

“Forecasts under review but not expected to change materially pre-meeting though we will tweak geographic assumptions given third quarter trends, better expected EM in the fourth quarter and softer fourth quarter group comparatives.”

By 0952 GMT, shares had fallen 1.82% to 1,453p.