WPP Plc share price up, posts rising first-half profit despite currency headwinds

The worlds biggest advertising agency by sales – WPP Plc said in a statement today that it has surpassed its forecast at the beginning of the year after its first-half sales exceeded analysts projections.

WPP Plcs Chief Executive Officer Mr. Martin Sorrell said in a telephone interview today, which was cited by Bloomberg: “We’re strongly ahead of where we thought we’d be at the beginning of the year.”

According to WPPs statement, the companys revenue over the period increased by 2.7% from a year ago and reached £5.47 billion ($9.1 billion). This result was higher than analysts initial forecasts of £5.13 billion. Still, the company considers that the strong performance of the British pound hurt its sales. WPP shared that almost £2 billion of client billings and £80 million of its profits before tax were wiped by currency headwinds.

With currency effects stripped out, revenue was up 11.3%. Net sales fell by 1.9% to £4.79 billion, which however is a 6.3% increase when converted to U.S. dollars. According to the advertising companys statement, its profits before tax were 15% higher in comparison to the ones posted a year ago.

Mr. Sorrell said in an interview for BBC News: “The strength of sterling has ravaged… our revenue figures and profits figures on a reported basis. But when you look at our underlying performance its very strong.”

In June 2014 Mr. Sorrell said that WPPs growth had slowed in developing markets such as India and Brazil. Still, these markets showed a better performance in comparison to the mature U.S. and European markets.

WPP remains the the leader in the advertising market after the merger negotiations between Publicis Groupe SA and Omnicom Group Inc. fell apart.

WPP Plc added 1.87% by 11:35 GMT to trade at GBX 1 250 per share in London, marking a one year change of +2.38%. The advertising agency is valued at £16.17 billion. According to the Financial Times, the 27 analysts offering 12-month price targets for WPP Plc have a median target of GBX 1 470, with a high estimate of GBX 1 600 and a low estimate of GBX 1 150. The median estimate represents a 19.80% increase from the previous close of GBX 1 227.