WPP like-for-like revenues fall 5.8% in first quarter of 2009

LONDON - WPP Group has reported a 5.8% year-on-year decline in like-for-like revenues during the first three months of 2009.

In a trading update issued this morning, WPP said the drop in like-for-like revenues reflected cuts in client spending in reaction to the global financial and economic crisis.

WPP had previously said it expected like-for-like revenue to fall 2% this year after a 2.7% increase in 2008.

The advertising group felt most economic pressure in the US, with the UK less affected and Latin America, Africa and the Middle East least affected.

In a statement, WPP said: "The first half of 2009 will clearly be very difficult, with the second half, although continuing to be tough, likely to improve relatively.

"Any recovery, of sorts, will probably come in 2010."

Reported revenues in the first quarter rose by 36% to £2.12bn, reflecting the acquisition of market research group TNS in October 2008, or 11.1% at constant currencies, reflecting the effects of the weaker UK currency.

WPP said that although revenue was below budget, operating margins were ahead and revenue shortfalls were offset by operating cost reductions.

The company said by the end of March it had reduced headcount by 2% year on year, or by 2,280 people, to 109,408, excluding associates.

WPP said its short-term focus will continue to be on "balancing the likely fall in revenues against staff costs and headcount".

The rate of revenue decline eased in March, although WPP did not know whether this reflected stabilisation or restocking of inventories.

On Sunday, The Sunday Times Rich List revealed that Sir Martin Sorrell, the chief executive of WPP Group, saw his fortune shrivel by £23m to £83m. Sorrell's WPP stake is worth £63m, he also has other interests.

Separately, Omnicom Group revealed yesterday that its revenues fell 14% in first quarter of 2009 and the group's post-tax profit suffered a 21.4% fall.

Read Bob Willott on the bottom line blog:

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