This morning he was on the airwaves again; promoting (or defending) WPP’s first quarter results and referring inter-alia to a world economy with a ‘corrugated’ bottom, bumps here and there presumably.
But at least he didn’t replicated last year’s howler when he said that paying company tax was ‘voluntary.’
So what’s been happening at WPP?
First quarter 2013 revenue rose 5.9 per cent to £2.53bn (good) although much of this was due to currency movements in its favour and acquisitions. Organic growth was between two and three per cent (not so good).
Digital now accounts for about a third of its business and much of this is in emerging markets; all in line with the SMS strategy although, looked at the other way round, this still means that two thirds of this £14bn behemoth is still old stuff. Sorrell said yesterday that he expected to spend between £300m and £400m this year on small-to-medium sized acquisitions (there aren’t many big ones left apart from Havas maybe); a bit less than great rival Maurice Levy of Publicis Groupe said recently that he was going to spend.
WPP’s debt nudged back above £3bn though which some shareholders might worry about.
By activity, advertising and media buying was strongest with consumer insight (market research to you and me) perking up after a long flat period but PR down. The company’s reorganisation of its leading PR outfit Hill & Knowlton does not seem to have worked so far.
By region America was almost flat, which will be disappointing as the wider economy there is recovering; Europe was actually a bit better than expected (although nobody expects very much these days) while the UK was positively vigorous with nearly 12 per cent gross revenue growth and improved margins too.
It’s hard to say quite why this should be. WPP’s UK ad agencies are not, by and large, taking the world by storm although it has a virtual stranglehold on media with its GroupM gang of MediaCom, Mindshare, MEC and Maxus controlling over a third of the market. Maybe last year’s big acquisition of digital agency AKQA helped things along significantly although it’s noteworthy that in the small print of the report WPP confirms that digital doesn’t enjoy the margins of old school advertising.
The full results are here.