WPP revenues down but ‘less worse’ than previous quarter

WPP, which owns branding and design groups including Landor, Fitch and The Brand Union, has reported a like-for-like revenue drop of 8.7 per cent in the third quarter – an improvement on the second quarter’s 10.5 per cent fall.

The group described the results as ‘less worse’ than the first and second quarter figures for 2009. Branding and identity, healthcare and specialist communications groups were least affected by the drop. Revenues in this sector were down by 5.9 per cent in the third quarter.

Headcount at the group has continued to decline, with the like-for-like number of people employed by the group dropping by more than 11 000 from December 2008 to September 2009 to stand at 101 333 – a drop of more than 10 per cent.

WPP saw its share price jump by 28 points on the London Stock Exchange as it unveiled the results.

A spokesman for the group says, ‘There is little doubt that consumer and corporate confidence has recovered somewhat from the panic levels of the fourth quarter of 2008 and the first quarter of 2009. Confidence, however, remains fragile among consumers because of the shadow of high unemployment levels, and among corporates because armageddon and “Apocalypse Now” were barely avoided in September 2008.

‘While the hearts of chief executive officers and chief marketing officers are stronger and their minds clearer, increased confidence is still not transferring to their cheque-writing hands. Brand investment is still in check, particularly in the West.’

The group is predicting an LUV-shaped global recession – with an L-shaped recovery in Western Europe, a U-shaped one in North America, and a V-shaped one in the emerging markets of Brazil, Russia, India and China.

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