WPP sales slipped in the first three months of the year as the advertising giant told investors it is closer to selling market research division Kantar.
Revenue rose almost one per cent year on year to £3.59bn in the first quarter of 2019 but like-for-like revenue fell 2.8 per cent.
The media behemoth blamed weak performance in the US – its biggest market – for the dip, where like-for-likes fell 8.5 per cent as the firm shed big clients in the automotive, pharma and fast-moving consumer goods sectors.
“Continued pressure” on the market also hurt WPP, it said.
“As anticipated, our first quarter trading update reflects the impact of certain significant client losses in 2018, in particular in the United States,” said chief executive Mark Read.
Elsewhere UK like-for-likes declined almost one per cent and Europe fell 0.3 per cent, though WPP saw 2.3 per cent growth in like-for-likes in the rest of the world.
The firm also chopped down its net debt, slashing £712m from its debt pile to reduce it to £4.88bn via disposals as chief executive Mark Read embarks on a three-year restructuring plan after taking over from former boss Sir Martin Sorrell in December.
It added that the previously announced sale of Kantar is “progressing well”.
WPP didn’t change any of its full-year predictions, but warned like-for-like sales will suffer a drop of between 1.5 per cent and two per cent due to “stronger headwinds” in the second half of the year.
One of Read’s medium-term targets is to achieve organic growth in line with WPP’s peers.
“Although we face a challenging year, especially in the first half, I am encouraged by how well our people, agencies and clients are responding to our new strategic direction. Our expectations for the full year are unchanged,” Read said.
He added: “Our newly formed agencies are showing initial signs of success in new business pitches. The most recent merger, Wunderman Thompson, has followed VMLY&R’s strong start by winning Duracell’s international creative account. BCW has brought in nearly $70 million in new business in its first year.”