ADVERTISING mogul Sir Martin Sorrell blamed “four grey swans” for a slowdown in global business yesterday as his company WPP slashed forecasts for the second time this year.
Sir Martin said the Eurozone crisis, political tensions in the Middle East, sluggish growth in China, and the state of the US economy were dragging WPP’s growth downwards.
The company said revenue is likely to grow at between 2.5 and three per cent this year. This is down from a 3.5 per cent prediction made at the end of August and four per cent before that. Shares fell just over 2.5 per cent.
“There seem to be four ‘grey swans’, grey because we know about them. By definition, we do not know the black ones,” Sir Martin said.
He told City A.M. that the biggest cloud hanging over his business was uncertainty in America over the country’s deficit, which is being drawn out by the presidential election. “The American deficit has now become the key issue rather than the Eurozone,” Sir Martin said. “US businesses want Romney to win because he is more likely to deal with it but even if he were to win there will still be a deadlocked Congress.”
WPP said revenue had grown 1.6 per cent year-on-year to £2.5bn in the third quarter. This was largely held back by falls in western continental Europe, which shrunk 8.6 per cent.
Sir Martin highlighted the UK and Asia as promising areas, while digital growth was above expectations. WPP this year set a target of deriving 35-40 per cent of revenues from digital operations in the next five years, but Sir Martin said it was almost at 35 per cent already. “I’d like to have done more in digital because we would not be reporting these numbers,” he said.