WPP share price dips as revenues rise boosted by weakened sterling - Sir Martin Sorrell's FTSE 100 listed advertising group has also bought US firm Deeplocal

Caitlin Morrison
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Sir Martin Sorrell, WPP's group chief executive (Source: Getty)

WPP has reported that weaker sterling helped drive an increase in revenue during the first quarter of 2017, and also announced the acquisition of US firm Deeplocal.

The figures

Revenue was up 16.9 per cent quarter-on-quarter, to £3.6bn, while on a constant currency basis it rose 3.6 per cent.

Like-for-like revenue grew by 0.2 per cent, and like-for-like sales grew 0.8 per cent.

The company reported $2.1bn (£1.6bn) of new business in the quarter, compared with $1.8bn in the same period of last year.

Why it's interesting

The company said its 16.9 per cent revenue hike was driven partly by growth from acquisitions (3.4 per cent) but mainly by "the weakness of sterling against the US dollar, the euro and other major currencies", which made up 13.3 per cent of the increase.

WPP said it is still reviewing its preliminary revised forecasts, but "early indications are that full year like-for-like revenue and net sales will be up around two per cent, with a stronger second half reflecting the comparatively weaker second half of 2016". This is in line with the estimates set out in the firm's annual results last month.

The group also announced today that its digital investment arm has bought US firm Deeplocal, an "innovation studio" focused on product invention, design and engineering for marketing campaigns. Clients of the newly acquired company include Google, Netflix and Airbnb.

What WPP said

"In 2017, our prime focus will remain on growing revenue and net sales faster than the industry average," the firm said in this morning's results statement.

"At the same time, we will concentrate on meeting our operating margin objectives by managing absolute levels of costs and increasing our flexibility in order to adapt our cost structure to significant market changes and by ensuring that the benefits of the restructuring investments taken in 2015 and 2016 continue to be realised."

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