Summary:

WPP CEO Sir Martin Sorrell had predicted a two percent revenue fall for 2009, then revised it downward to four percent after a lackustre fir…

Sir Martin Sorrell
photo: AP Images

WPP CEO Sir Martin Sorrell had predicted a two percent revenue fall for 2009, then revised it downward to four percent after a lackustre first half.

In reality, both figures are wide of the mark: for the first nine months of the year, WPP made revenue of £6.29 million — an impressive 24.5 percent year-on-year growth on paper, at constant currencies — but like-for-like, without the benefits of currency fluctuations and the acquisitions of TNS, that tumbles to a 8.4 percent drop.

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Q3 declines improved: The best WPP can say about Q3 is that it’s “less worse” than Q2. For the three months to September 30, revenue rose 16.7 percent year on year to £2 billion but, again, without the TNS purchase and the weakness of the pound, that’s down 8.7 percent year on year on a like-for-like basis which is only a slight improvement on WPP’s 8.3 percent revenue decline in H1. Period on period, though, that is an improvement on Q2’s 10.5 percent drop.

Online revenue: WPP’s healthcare and specialist communications division, which includes online and interactive, performed better than other divisions with revenue 9.6 percent lower year on year at £858.5 million. For the year to date, the division made 6.6 percent less revenue than the same period last year

Staff cuts: Sir Martin said he would cut 7,200 jobs this year, but he’s bettered that: headcount is now 11,232 lower than it was at December 31 2008, a 10 percent drop in staff overall.

Panic over, doubts remain: “There is little doubt that consumer and corporate confidence has recovered somewhat from the panic” of Q408 and Q109, says WPP in its earnings. But it warns that confidence in the market is fragile for consumers “because Armageddon and Apocalypse now” were only barely avoided in September 2008. CEOs might be more confident, but “increased confidence is still not transferring to their cheque-writing hands”. The company says “even-Stevens” is a good bet for its 2010 budgets, meaning WPP expects the recovery, if it comes, will be a slow one.

Thai acquisition: Also on Friday, WPP separately announced it has bolstered its digital operations and its Far Eastern presence with the acquisition (subject to anti-trust approval) of a 51 percent stake in Bangkok-based digital agency mInteraction, one of the country’s largest. The two-year-old company employs 45 people, its clients include Cadbury, Unilever and Sony (NYSE: SNE) and it made revenue of 35.4 million Thai Bart (£640,000) in 2008

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