Growth at the world’s largest advertising group, WPP, has unexpectedly slowed in the third quarter as geopolitical tension and global economic woes take their toll.
Like-for-like net sales in the three months to 30 September grew three per cent, compared with expectations of 3.3 per cent and 4.1 per cent in the first half of the year. Stripping out currency costs, net sales were up 6.1 per cent as the pound continued to strengthen against the US dollar and the euro.
The ad group, led by Sir Martin Sorrell, said it expects this slowdown to continue into fourth quarter as clients remain risk averse.
“All in all, whilst clients may be more confident than they were in September 2008, they broadly remain unwilling to take further risks, particularly given multiple geopolitical flash points,” the company said.
Like-for-like revenue for the quarter was up 7.6 per cent, or 10.6 per cent on a constant currency basis.
WPP reiterated its full year targets, however, and shares were up 0.4 per cent in early trading.
Sorrell also added two new "black swans" to its economic outlook - events with unknown effects - Ebola and protests in Hong Kong.