WPP returns to growth in third quarter

Third-quarter like-for-like revenue less pass-through costs rose 0.5%, with reported revenue up 1.4% and LFL revenue up 4.1%.

Revenue in North America was up 1.7%, Western Continental Europe saw 2.2% growth and the UK was flat. This was partially offset by a 2.2% decline in Rest of World, reflecting a continued drop in China, where revenue slumped 21.3%.

WPP said client wins during the quarter included Amazon, Unilever and Henkel. It also pointed to a strong start to the fourth quarter, as it won contracts with Starbucks and Honor.

The company said full-year expectations remain unchanged. For 2024, it continues to expect LFL revenue less pass-through costs to be flat to 1% lower, with Q4 facing a tougher comparative than the third quarter and macro uncertainty.

Chief executive Mark Read said: "Our third quarter delivered like-for-like growth in net sales, with a strong performance from GroupM in particular. We saw growth in North America, Western Continental Europe and India, though trading in China remains difficult.

"Most importantly, we returned to form in new business, winning Amazon's media account outside the Americas and securing our media relationship with Unilever, including taking back the retail media and activation business in the United States.

"Our success with two of the world's top ten advertisers demonstrates the renewed competitiveness of our offer. We are also proud to be supporting the new Starbucks leadership team with our recent creative win in the United States."

At 1205 BST, the shares were up 4.2% at 806.40p.

Russ Mould, investment director at AJ Bell, said: "WPP is one of the biggest economic bellwethers on the UK stock market. If companies are feeling confident about the outlook, they’re more likely to spend money on marketing and advertising. If they’re worried about an economic downturn, they cut back on promotions. That’s why WPP is a highly cyclical stock and its updates typically provide a clue on corporate confidence.

"Its third quarter update doesn’t ring any alarm bells, but neither does it scream great times ahead. While WPP works for some of the world’s biggest companies, its third quarter net new billings only showed minimal progress year-on-year. Year-to-date the figure is running behind 2023’s equivalent. North America, Western Europe and India are doing well, China is not.

"With no change to full-year guidance, there is a sense of caution around WPP’s update and while it talks with optimism, in reality it could be a tough few months to go."