WPP sees PR revenue recovery thwarted by strong pound

Burson-Marsteller parent company WPP has reported a 4.1 per cent drop in PR and public affairs revenue despite organic growth continuing from the final quarter of 2013 into the first quarter of this year.

Sir Martin Sorrell: considering a change to operating company incentive structures
Sir Martin Sorrell: considering a change to operating company incentive structures

First-quarter PR and public affairs revenue at the Sir Martin Sorrell-led holding company, which houses consultancies such as Hill+Knowlton Strategies and Finsbury, was down £9m to £212m.

However, the recent strengthening of the pound against other currencies was the main culprit for the fall, and after stripping out currency changes revenue was up 2.9 per cent. On a like-for-like basis, which excludes acquisitions and currency changes, revenue was up 1.9 per cent.

All regions except Latin America and the Middle East grew in the first quarter, with growth particularly strong in the UK, Asia-Pacific and Africa.

At an overall level WPP managed first-quarter revenue growth of 1.5 per cent to hit £2.57bn, with like-for-like growth of seven per cent.

The company revealed it is considering making a change to the incentive structure for its operating companies. It said: "The group continues to improve co-operation and co-ordination among its operating companies in order to add value to our clients’ businesses and our people’s careers, an objective that has been specifically built into short-term incentive plans.

"We may, in addition, decide that a significant proportion of operating company incentive pools are funded and allocated on the basis of group-wide performance over the coming years."

This pursuit of co-ordination is summed up by Sorrell with the word "horizontality". He recently described WPP’s new government and public affairs practice as "horizontality at work".

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