While rival Publicis is making positive waves about the ad market bouncing back, WPP says we’re still not out of the woods.
People feel better about the economy, but the “increased confidence is still not transferring to their check-writing hands,” says WPP.
Here’s the AP’s full report:
LONDON (AP) — Britain’s WPP Group PLC, the world’s second-largest advertising company, reported Friday that revenue rose 7 per cent on a constant currency basis in the third quarter thanks to a major acquisition a year ago. Excluding gains from the takeover, revenue fell 9 per cent.
The company said conditions were “less worse” than in the second quarter though rising business confidence had yet to translate into bigger advertising spending.
For the three months ending Sept. 30, WPP said revenue on a reported basis was 2 billion pounds ($3.3 billion), including the acquisition of British market research company Taylor Nelson Sofres late last year. That compared to revenue of 1.7 billion pounds in the third quarter of 2008.
Reported revenue had been down 10.5 per cent in the second quarter.
The company did not report earnings figures in its trading update.
WPP shares were up 3.2 per cent at 562.5 pence on the London Stock Exchange. Shares fell as low as 344.9 pence in February, and recently peaked at 596.5 pence on Oct. 15.
WPP said like-for-like revenue in the United States was down 6.1 per cent, Britain was down 9 per cent, western continental Europe was down 12.5 per cent and Asia-Pacific was down 10.7 per cent.
“July, August and September all showed ‘less worse’ revenue growth against April, May and June,” the company said.
WPP said consumer and corporate confidence “has recovered somewhat from the panic levels of the fourth quarter of 2008 and first quarter of 2009.”
“Confidence, however, remains fragile amongst consumers, because of the shadow of high unemployment levels and amongst corporates, because Armageddon and Apocalypse now were barely avoided in September 2008.”
It said that while executives’ optimism had improved, “increased confidence is still not transferring to their check-writing hands.”
For the first nine months, revenue of 6.3 billion pounds was up 24.5 per cent on a reported basis compared to 5 billion pounds to last year; up 8 per cent on a constant currency basis and down 8.4 per cent with acquisitions and currency fluctuations stripped out.
The company said it had cut its work force by 10 per cent on a comparable basis during the nine months.
On the Net: http://www.wpp.com/wpp/investor/