WPP: PR and public affairs outperforms again amid Q3 slowdown

PR and public affairs continued to be WPP's strongest performing sector in the third quarter of 2018 amid a slowdown in growth at the holding company.

Mark Read: 'Turning around WPP requires decisive action and radical thinking'
Mark Read: 'Turning around WPP requires decisive action and radical thinking'

Like-for-like revenue (minus pass through costs) in the PR and public affairs division grew 2.5 per cent in Q3 to £298m ($384.7m).

"This was driven by strong growth in both the United Kingdom and Germany through the group's financial public relations businesses and continued strong growth in Asia-Pacific and the Middle East," WPP stated. The division includes Burson Cohn & Wolfe, Hill+Knowlton, Finsbury and Buchanan.

Across WPP, like-for-like revenue grew 0.2 per cent in Q3 to £3.76bn ($4.85bn). It represents a slowing of growth against the second quarter (+2.4 per cent) and Q1 (+0.8 per cent).

Growth was weakest in North America (-5.3 per cent), although reductions there were "partly offset" by "improving performance" in the PR and public affairs businesses.

Like-for-like growth in the UK fell back -2 per cent, with a stronger performance in Western Continental Europe (-0.4 per cent) and Asia-Pacific, Latin America, Africa and the Middle East and Central and Eastern Europe (+2.5 per cent).

WPP also announced that group finance director Paul Richardson is to retire after 22 years, and is set to leave the company "during the course of 2019".

CEO Mark Read, who was confirmed in the role in September following the departure of Sir Martin Sorrell, said: "Turning around WPP requires decisive action and radical thinking, and our performance in the third quarter of 2018 reinforces our belief in that approach.

"The slowdown primarily reflects a further weakening of the performance of our businesses in North America and in our creative agencies, issues that we highlighted in our interim results.

"As previously stated, our industry is facing structural change, not structural decline, but in the past we have been too slow to adapt, become too complicated and have under-invested in core parts of our business."

Changes under Read’s leadership have included making 16 disposals to date, which have raised £704m ($908.8m); merging agencies VML and Y&R; and integrating its healthcare agencies with Ogilvy, Wunderman and the newly formed VMLY&R.

Read promised "radical evolution" at WPP in an interview with Campaign last month.

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