WPP reported organic revenue growth of 4.3% for the first half of the year. Reported revenues were up 11.9% to $6.5 billion British Pounds (about $8.6 billion at today’s exchange rate).
By comparison, Publicis Groupe delivered 2.8% organic revenue growth for the same period while Omnicom and Interpublic posted 3.6% and 5.1% growth respectively.
WPP Net sales were up 11% to $5.6 billion British Pounds ($7.4 billion) with organic net sales growth of 3.8%. The net sales tally, which was about $1 billion less than the holding company’s revenue total, excludes the ad inventory that WPP sells directly to clients. The other holding companies do not publicly disclose net sales.
WPP’s operating profit for the first half was up 15% to 769 million British Pounds ($1 billion).
Factoring July numbers into the mix, WPP said its year-to-date organic revenue growth was 4.3% with organic net sales growth of 3.5%. The company said it remains on track to post more than 3% growth (both revenue and net sales) for the full year, albeit with a slightly weaker second half.
The company reported a 122 million BP ($162 million) extraordinary loss primarily related to a write-down of its investment in comScore, which is undergoing an internal financial audit. The audit was followed by a sharp drop in the market value of the company in which WPP has close to a 20% stake. The audience measurement company has not yet released year-end 2015 results and is not expected to until the audit is complete.
Earlier this month comScore shook up its top management ranks with comScore Co-Founder Gian Fulgoni being named CEO of the company, replacing Serge Matta. Speaking to analysts this morning, WPP CEO Martin Sorrell said he was “pleased” with the management reshuffling but “totally puzzled” by the “non-resolution” on the firm’s accounting issues. For one thing, it’s a distraction for the measurement company at a time when many in the industry are looking for help in “how to evaluate digital in a real way.” The internal issues could result in lost opportunities, he added.
Commenting on the ANA transparency report, GroupM Chairman Irwin Gotlieb, also speaking to analysts acknowledged that it has sparked an increased level of media audits in North America and has “put pressure on terms and master agreements” with clients. Sorrell said he believed the ANA report has revealed that the “procurement pressure” brought by clients to their agency relationships “might have been too great.”
Sorrell also said he was “very disappointed” with two recent client losses—Volkswagen and AT&T, particularly the latter, which spends upwards of $2 billion a year on advertising. But he blamed the holding company for the loss, noting that he believed the offering wasn’t integrated enough—per the company’s emphasis on “horizontality.” It’s also a very complex offering and the company should have done a better job with the “narrative” of explaining the benefits to the client, Sorrell said.