Confident WPP raises its outlook

Martin Sorrell’s group was cautiously optimistic about 2011 and 2012, despite a host of economic concerns on the horizon, and it now expects like-for-like revenue growth to be more than six per cent, compared with an earlier forecast of five per cent growth.

Analyst Paul Richards at brokerage Numis said: “To lift forecasts at this stage of the year really gives an indication of the confidence they have in the business. In terms of sentiment it does feel the strongest of the agencies that have reported so far.”

Numis raised its profit and earnings forecast for 2011 and 2012 and said it saw scope for further upgrades later in the year.

WPP, whose ad agencies include JWT and Ogilvy & Mather, said like-for-like revenue was up 6.7 per cent in the first quarter.

The results follow slightly disappointing numbers from rivals Omnicom, which reported first-quarter organic growth of 5.2 per cent, and Publicis, which reported organic growth of 6.5 percent.

WPP said the strong performance from more mature markets such as the US and Germany and more traditional media such as free-to-air television had continued in the first quarter, while faster-growing markets such as Asia Pacific and Latin America had picked up.

Western companies flush with cash but reluctant to spend on long-term investments have spent heavily on branding and advertising in order to protect their market share.