Maja Pawinska Sims 12 Aug 2019 // 11:26AM GMT
LONDON — Growth at WPP’s public relations firms, which include BCW, H+K Strategies, Finsbury and Buchanan, slowed in the second quarter, with like-for-like revenue down 2.6% to £228m.
This compares with a drop in like-for-like revenue less pass-through costs in the first quarter of 0.4%. For the first half of 2019, PR revenue fell by 1.5%.
PR accounted for 7% of the holding group’s total revenue over the half year, and the segment is no longer out-performing the rest of the group by revenue, as it did in 2018.
WPP as a whole reported like-for-like revenue (less pass-through costs) down 2% over the half year, although Q2 showed an improvement on Q1, with a drop of 1.4% compared to 2.8% in the first quarter. In the UK, Q2 revenue was up 1.3%, but in the US it dropped by 5.4%.
Chief executive Mark Read said in his earnings statement: “WPP’s performance in the second quarter was slightly ahead of our internal expectations but in line with our full-year guidance and three-year strategic targets. Clients are responding well to our new offer, as evidenced by recent wins and expanded assignments including from eBay, Instagram and L’Oréal. An encouraging number of our businesses and markets are achieving good growth.
“That said, we are still in the early stages of our three-year turnaround plan, and we remain focused on returning the company to sustainable growth over that period. Our guidance for the full year is unchanged. “We continue to simplify WPP, with a more integrated offer for our clients, better, more collaborative working environments for our people, and less complicated management structures.”
WPP’s statement also provided an update on its increasingly integrated and streamlined approach across its agencies: the group aims to ‘co-locate’ more than half of its workforce by 2023, and has so far opened 18 campuses and merged 102 offices. It has also closed 60 offices and made 3,100 of the planned 3,500 redundancies outlined in the ‘radical evolution’ plan last December.
In July, WPP agreed to sell 60% of its Kantar business to Bain Capital Private Equity; when the deal is completed Read said it will generate proceeds of around £3.6bn.