Strong WPP results may hint at recovery for brand consultancies

WPP has reported a strong start to the year, with a return to like-for-like growth in all business segments and most major markets.

The communications company, which operates design consultancies including Superunion, AKQA and Landor & Fitch reports that revenue in the first quarter is up 1.8% from last year at £2.9 million.

All regions and business segments have improved from 2020’s fourth quarter. In the UK, revenue less pass-through costs were up 3.9% from last year.

Pass-through costs recognised as revenue take into account ongoing costs to third party vendors and services.

According to WPP, client spend on marketing in the first quarter also “showed increasing resilience despite further waves of coronavirus in some markets”.

The best performing sector was WPP’s “specialist agencies” which includes brand consultancies like Landor, Superunion and DesignBridge. In this field, revenue less pass-through costs were up 7.5%.

WPP CEO Mark Read says: “WPP has had a strong start to the year with a return to growth in all business lines and most major markets.”

In particular, he says that ecommerce, digital media and technology are “resonating with clients as their markets recover and they seek to transform their offer for future growth”.

This has been boosted by the vaccine roll-out in many markets which is improving visibility, according to Read.

He does however caution over the pace of recovery, adding that there is “inevitably uncertainty”.