WPP boss Sir Martin Sorrell has reported that the company’s revenues grew by one per cent in March, the first time it has inched forward since back in 2008.
For the first quarter its revenues were still down two per cent although this comes back to 0.5 per allowing for currency movements.
But it’s hardly great progress for the world’s biggest marcomms group, especially when you consider that in the first quarter French rivals Publicis grew by 3.1 per cent and Havas by 1.5 per cent respectively. Especially considering that Sorrell reports a bounce in the US and a better than expected performance in the UK.
Surely this and all those much-lauded businesses in the Far East should have accounted for a rather more vigorous upturn?
The fact is that WPP has always depended on big acquisitions for its many advances (the most recent was buying market researcher TNS for £1bn) but, once these companies are in the bag, seems unable to extract significantly better performance from them.
This despite Sorrell being a legendary hard taskmaster on under-performers.
So WPP stock is treated as a kind of commodity play on the ad market, if you think the market is for in one of its upswings you buy, otherwise you sell.
And maybe that’s what always happens when you become as big as WPP.
But it’s hard to see where the next big WPP acquisition is going to come from, unless competition authorities around the world suddenly change the rules to allow it to buy, say, media buyer Aegis.
So, with JWT, O&M, Y&R and Grey, plus a gaggle of medium-to-big-market research companies, already tucked away there’s quite a tough growth question for Sorrell to answer.
In nearly 30 years of running WPP Sorrell has been remarkably good at keeping his shareholders on side, even when the company became critically over-borrowed in the early 1990s.
But he can’t afford to be out-performed by his rather smaller French rivals.