Cohn & Wolfe strong but North America down as growth slows in WPP PR wing

Cohn & Wolfe was the standout performer in WPP's PR and public affairs division in the first quarter of 2016, although the division's growth was significantly down on Q4 2015.

WPP chief executive Sir Martin Sorrell: PR brands include H+K, Ogilvy and Burson-Marsteller
WPP chief executive Sir Martin Sorrell: PR brands include H+K, Ogilvy and Burson-Marsteller

The holding company published its Q1 2016 results this morning, with group-wide revenue of £3.1bn ($4.5bn), up 10.5 per cent on Q1 2015, or 5.1 per cent on a like-for-like basis, adjusted for currency fluctuations and acquisitions.

Making up 7.8 per cent of the group's total, PR and public affairs revenues were £239m ($348.6m). This is 6.9 per cent higher than Q1 2015, or 2.3 per cent like-for-like.

The company's financial report notes that this was "a slower rate of growth than the final quarter of 2015, but significantly stronger than the first quarter of last year". Like-for-like growth was just 1.2 per cent for the division in the first three months of 2015, as the firm's PR revenue rise accelerated through the year to grow 5.8 per cent across the 12 months.

The Q1 report says: "All regions, except North America, were up, with particularly strong growth in the United Kingdom, Asia Pacific and Africa & the Middle East.

"Cohn & Wolfe performed strongly, especially in the United States, driven by consumer and healthcare spending, together with the specialist public relations and public affairs businesses, Finsbury and Ogilvy Public Relations."

Cohn & Wolfe was also a standout performer in 2015 as a whole.

Of WPP's other divisions, the firm's advertising and media investment management, which makes up nearly half of its revenue, grew most strongly (7.9 per cent like-for-like), followed by 4.7 per cent for the branding and identity, healthcare and specialist communications segment, while data investment management was nearly static (0.5 per cent).

In its outlook at the end of the report, the firm says: "If you are running a legacy business, as many of our clients are, you face disrupters like Uber and Airbnb at one end of the spectrum, zero-based cost budgeters like 3G and Coty at the other end, with seemingly short-term focused activist investors in the middle, like Nelson Peltz, Bill Ackman and Dan Loeb."

In addition, it cites barriers to growth such as economic uncertainties in the BRIC nations, political concerns in the Ukraine as well as Greece and the UK's EU referendum, but goes on to add a more positive note.

"Countries and opportunities like Indonesia, the Philippines, Vietnam, Egypt, Nigeria, Mexico, Colombia and Peru and recently a post-Macri Argentina add to confidence. In addition maybe Cuba and even Iran (despite the continuing effective impact of sanctions, especially on US citizens) will also improve the sentiment along with a continuing mild recovery in Western Continental Europe," it says.

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