Healthy WPP performance marred by currency shifts
LONDON - The strength of the pound has pushed down WPP Group's first-quarter revenues by 0.7% to £1.37bn, although the group continues to grow around the world, according to a trading update.
Its share price dropped 2% in early trading this morning, despite a rise in the overall stock market index.
During the first quarter, WPP, led by chief executive Sir Martin Sorrell, won net new business of £516m. OgilvyOne picked up the global account for Unilever's Vaseline, reported to be worth $30m (£15m), and Berlin Cameron United the US account for Heineken, reported to be worth $80m.
The UK remains the group's slowest growing territory and notched up just a 2% rise in revenues.
Performance was better in the US, which grew by a healthier 6.5% in dollar terms. When converted to sterling its contribution was down 5.1% to £531.6m. According to WPP, the value of the dollar against sterling fell 11% year on year.
The picture in Europe is improving, with revenues up 4% in local currency, while there was 12% growth for the rest of the world (Asia Pacific, Latin America, Africa and the Middle East).
By service sector, the best performing part of the company was its public relations and public affairs offering, which grew almost 13%.
This week, WPP acquired a 49.9% stake in the London independent agency Clemmow Hornby Inge for £30m.
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