WPP up as Sorrell says recovery stronger than expected

LONDON – Shares in WPP Group were up this afternoon as chief executive Sir Martin Sorrell said that March and April were looking better than expected.

Speaking at a Merrill Lynch conference on Tuesday, Sir Martin said March and April were stronger than the first-quarter average as momentum built.

The news was taken by dealers to mean the WPP is likely to have results coming in above forecast. Shares in WPP rose by as much as 1.7%, or 9.5p, at one stage before slipping back slightly to 568.5p up 1.61p or 9p.

At the presentation, Sir Martin reiterated comments made in April that he expected to set margin targets of 14%-15% for 2005 and at 15%-plus for 2006.

Sir Martin added that new-business wins within WPP had been very strong referring to success such as HSBC awarding WPP Group agencies its $600m (£327m) global advertising and marketing business after a pitch against rivals Interpublic Group and Omnicom and the winning of the £56m Toys R Us account. WPP is also in the running for Samsung's £300m global account, which is down to a two-horse race.

The comments made by Sir Martin echo reports earlier this week, which suggest that the advertising recovery in the US is beating predictions with spend up in the first quarter by 9.6% as it reaps the benefits of the US Presidential elections and the upcoming Olympic Games in Athens.

The latest adspend figures follow a buoyant upfront season last month when Nielsen Media Research said that US spend was up by 7%.

In April, WPP reported revenues for the first quarter of the year up by nearly 6%, including a 12% rise in the UK, and said there were signs of an increasing number of new-business opportunities.

"There are an increasing number of new-business opportunities as clients turn their attention to managing for growth and the top line, rather than focusing totally on costs. In addition, there are signs that corporate expenditures, particularly in technology, are picking up, possibly filling any potential vacuum in consumer spending," WPP said in its April trading statement.

If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the .

Topics