WPP cuts sales and profit margin forecasts
Advertising behemoth WPP has cut its sales and profit margin forecasts as it continues to battle with “low growth” advertising markets.
The company has confirmed that like-for-like sales growth and operating margins will now fall in 2017, instead of the initial prediction of 1%, and 0.3% the firm predicted in August.
WPP’s chief executive, Sir Martin Sorrell, told the BBC: “Brexit in a way has actually stimulated our business. Clients, instead of investing in fixed capital are investing in variable costs [such as advertising] in an effort to stimulate growth,” before adding that the world was in a “new normal of low growth, low inflation and limited pricing power”.
Shares in WPP fell by 1% as news reached the City.
Morrell added that three major events could help with growth in 2018.
“Any further marketing investment reduction may well be countered by the mini-quadrennial events of 2018 – the Winter Olympics in South Korea; the FIFA World Cup in Russia; and the mid-term Congressional elections in the United States.”