ADVERTISING firm WPP’s full-year revenue forecast, raised in April, is likely too pessimistic, the group’s chief executive said, despite warning the UK market would be tougher due to deep government budget cuts.
The world’s largest advertising company by sales was overly optimistic last year and therefore is being cautious this year with its forecast for like-for-like revenue to rise two per cent, chief executive Martin Sorrell said yesterday.
Like-for-like sales at WPP rose two per cent in the first five months of the year, increasing five per cent in May, he said.
Sorrell said he was comfortable with analyst estimates that WPP would achieve an operating margin of between 12.7 and 13 per cent this year, up from 11.7 per cent last year.
Sorrell also said WPP – whose companies include ad agency JWT and public-relations firm Burson-Marsteller – had lifted a hiring freeze, with headcount up one per cent in the first five months.
The US ad market continued to improve in April and May, and faster-than-expected growth in that market was the primary factor behind April’s forecast hike, Sorrell said.
However, Sorrell warned that business was set to become more difficult in the UK after Tuesday’s Budget.
“The UK has been the best market of the ‘big five’ but I anticipate that after the austerity Budget, it’s going to get tougher,” he said.