With the group expected to announce a reduction of debt at its interim results tomorrow, UBS said management could restart the share repurchasing scaled back last year. “Although the impact on numbers would not be hugely significant, this would be hugely positive for sentiment as a signal of improving balance sheet strength and a lack of intention to do large acquisitions,” UBS analyst Alastair Reid wrote in a note.
The City has pencilled in a strong first-half performance from Martin Sorrell’s organisation on the back of the South African World Cup and rising advertising spend in Asia. Following a bullish trading update in May, the consensus view among analysts sees revenues staying flat at £4.3bn, but pre-tax profit hitting around £350m from last year’s £179.3m.
Investors will be particularly keen to hear Sorrell’s outlook for the second half of the year given the prospect of stuttering US growth. But Deutsche Bank analyst Patrick Kirby said WPP remained “a balanced way” of playing the gradual advertising recovery.