WPP shares were up more than 7% on the London Exchange after the holding company posted better-then-expected results for the third quarter, including a return to organic revenue growth. It was the first growth quarter in over a year for the company.
Reported revenues were up 5.2% to £3.29 billion ($4.21 billion), with organic revenue growth of 1.8% and 0.7% in net sales.
“Our growth in Q3 is encouraging,” said company CEO Mark Read. But he added that the company is focused on delivering “longer term agency goals” that were outlined in a December 2018 three-year transformation plan. “[We] know there will be twists and turns along the way.” The firm’s financial guidance for full-year 2019, including a dip in like-for-like net sales of between 1.5% and 2%, remains unchanged.
Net new business through the first nine months of the year was $3.9 billion (billings). Q3 wins included Mondelez, Centrica, eBay and a successful defense of the U.S. Marines account.
Read noted WPP shareholder approval of the sale of 60% of Kantar to Bain Capital earlier in the week and asserted that the deal would “further simplify our business and significantly strengthen our balance sheet.”
By region, North America remains a drag on growth and showed an organic revenue decline of 1.9% for Q3. All other regions were in the plus column, and all regions including North America posted better results compared to the first half of the year.
Reported revenue for the first nine months was £9.65 billion ($12.4 billion). Organic revenue was flat and net sales were down 1.5%.