LONDON: WPP Group's PR and public affairs business saw a 4.1% like-for-like drop in revenue in the first quarter to about $341.7 million.
The unit was the only WPP business sector to report a year-on-year revenue decline in the period.
The holding company said in an earnings statement that “the pattern of revenue growth in 2013 has started similarly to the final quarter of 2012, with constant currency growth showing continuing improvement across all sectors except public relations and public affairs and across all geographies.”
The holding company, which owns Burson-Marsteller, Ogilvy Public Relations, Cohn & Wolfe, and Hill+Knowlton Strategies, among others, said in an earnings statement that "North America, Western Continental Europe, and Asia-Pacific were particularly difficult" for PR and public affairs. The UK and Latin America "were stronger" in the quarter.
The London-based holding company's overall revenue increased by 2.1% on a like-for-like basis to $3.9 billion in the quarter, compared with Q1 2012. Gross margin growth was 1.9% in Q1.
While PR and public affairs revenue dropped 4.1% in Q1 on a like-for-like basis, the advertising and media investment management group saw revenues grow by 3.9%. Those of the branding and identity, healthcare, and specialist communications unit were up by 2.4% on a like-for-like basis.
WPP's overall Q1 revenue beat analyst expectations, according to Bloomberg. The company also raised its annual outlook.
Broken down by region, the group consisting of Asia-Pacific, Latin America, Africa, the Middle East, Asia, and Central and Eastern Europe led the pack with 7.8% like-for-like growth in Q1. The UK performed “well ahead of budget,” showing 3.7% like-for-like growth in the period. US revenue was down 1% and revenue from Western Continental Europe was down 0.8% in the quarter on a like-for-like basis.
WPP reported net new business of $1.5 billion in the period. The number of employees at the holding company has dropped 0.4% since the beginning of this year.
Like-for-like revenue changes do not take into account the impact of currency, acquisitions, or disposals.
This story was updated on April 26 with more information on WPP's Q1 performance.