H+K and Finsbury Glover Hering boost WPP's PR arm in Q1

WPP has reported a two per cent rise in like-for-like revenue in its PR division in the first quarter of 2021, as all its business segments saw growth in the period.

The PR performance was driven by Finsbury Glover Hering and Hill+Knowlton, which both saw growth in Q1, WPP said today.

Overall revenue in the PR arm, which also includes BCW, Buchanan and Clarion, fell three per cent to £206m (the figures exclude 'pass through' costs).

Last week, marcomms rival Omnicom said its PR firms saw organic revenue dip 3.5 per cent year-over-year in Q1. Other marcomms giants Publicis and Havas did not break out their PR numbers.

Across WPP, revenue was £2.33bn in Q1, up 3.1 per cent on a like-for-like basis and down 1.4 per cent overall. PR's performance was behind other divisions, with like-for-like revenue up 2.8 per cent at Global Integrated Agencies and up 7.5 per cent at Specialist Agencies.

Like-for-like revenue growth in the UK was 3.9 per cent (reaching £321m), with North America at +1.6 per cent (£886m) and Western Continental Europe at +3.7 per cent (£492m). Asia Pacific, Latin America, Africa & the Middle East and Central & Eastern Europe saw growth of 4.7 per cent (to £635m).

WPP said it won new business with a net worth of $1.3bn in the first quarter. The company reiterated its expectaions for 2021 of mid-single digit organic growth and headline operating margin in the range of 13.5 to 14 per cent.

CEO Mark Read said: "WPP has had a strong start to the year with a return to growth in all business lines and most major markets. Our strengths in e-commerce, digital media and technology, combined with our ongoing investment in creative talent, are resonating with clients as their markets recover and they seek to transform their offer for future growth. This week's launch of our new global data company, Choreograph, adds a further dimension to the WPP proposition as clients look for trusted partners to help them navigate a fast-changing data landscape.

"We have already secured a number of important assignments in 2021, including Absolut (global creative), JP Morgan Chase (global media), Salesforce (technology operations) and Sam's Club (US creative). We were also delighted to renew our valued partnership with the US Navy.

"The rollout of vaccines is improving visibility in many markets, although there is inevitably uncertainty over the pace of recovery. We are making good progress on our transformation programme, which will deliver significant efficiencies to reinvest in growth, and are confident of delivering our growth and profitability guidance for 2021."

Analyst Steve Liechti at Numis increased his forecasts for WPP's like-for-like revenue growth from 5.3 per cent to 6.5 per cent, and its earnings per share from 69.2p to 70p. He expected slightly lower margin for the year: 13.9 per cent versus the previous expectation of 14 per cent, "given regional performance disparities and the stronger US dollar".

He said the previous guidance "now looks conservative". He pointed to the impact of vaccines, albeit with uncertainty over the pace of recovery, and "good progress" on WPP's transformation programme.

At its full-year results last month, WPP reported a weaker performance in its PR arm in the fourth quarter of 2020, when like-for-like revenue in the division declined 4.1 per cent.

Last week WPP set out a commitment to net zero carbon emissions across its own operations by 2025 and throughout its supply chain, including media, by 2030. Yesterday WPP announced the launch of a global data consultancy called WPP Choreograph.

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