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WPP: New deals with Amazon and Unilever drive growth

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Read departs after more a 30-year stint at the London-listed advertising group, of which seven were in the top job.
Read departs after more a 30-year stint at the London-listed advertising group, of which seven were in the top job.

Like-for-like revenue at advertising giant WPP ticked up 4.1 per cent in the quarter to 30 September, despite a decline in business outside of the US and Europe.

However, net new billings declined year-to-date. The figure came in at $3.2bn (£2.5bn) compared to $3.4bn (£2.6bn) in 2023.

However, other regions struggled. Revenue in the UK was flat, while Chinese revenue declined 21.3 per cent, and the rest of the world dropped by 2.2 per cent.

WPP’s subsidiary Groupm was another bright spot. Revenue jumped 4.8 per cent throughout the quarter.

Like-for-like revenue less pass-through costs rose by just 0.5 per cent in the quarter. North American and Western Europe revenue ticked up 1.7 per cent and 2.2 per cent respectively.

New contracts with Amazon and Unilever helped boost revenue. A new contract with Starbucks is set to kickoff next quarter.

Therefore, the group kept guidance the same, with 2024 revenue less pass-through costs expected to be between a one-per cent decline and flat.

WPP also increased its operating profit margin target by 20 to 40 basis points.

It reported adjusted net debt on 30 September of £3.6bn, down £0.3bn on the prior year.

The 2024 operating profit margin improved by 20 to 40 basis points, excluding the impact of foreign exchange.

Following its results, WPP’s shares rose by around five per cent in early trades.

WPP boss Mark Read said: “Our third quarter delivered like-for-like growth in net sales, with a strong performance from GroupM in particular. We saw growth in North America, Western Continental Europe and India, though trading in China remains difficult.

“Most importantly, we returned to form in new business, winning Amazon’s media account outside the Americas and securing our media relationship with Unilever, including taking back the retail media and activation business in the United States.

“Our success with two of the world’s top ten advertisers demonstrates the renewed competitiveness of our offer. We are also proud to be supporting the new Starbucks leadership team with our recent creative win in the United States.”