WPP expects advertising profit rise in second half

Published on Friday 30 October 2009 20:51

ADVERTISING giant WPP yesterday predicted a "marked improvement" in second-half profits, but warned that consumer confidence remained fragile.

The company said that third-quarter trading was "less worse" than the previous three months, with revenue declines slowing to 8.7 per cent.

But the firm said: "Confidence remains fragile amongst consumers, because of the shadow of high unemployment levels, and amongst corporates, because Armageddon and Apocalypse Now were barely avoided in September 2008."

WPP, which owns brands such as Ogilvy & Mather and J Walter Thompson, slashed costs by cutting 10 per cent of its worldwide staff – more than 12,000 posts – since the start of the year.

It saw signs of improvement in the US, Asia and continental Europe, but detected softening markets in the UK, Middle East and Latin America.

In a colourfully worded update, WPP added that increased confidence among senior management in the corporate world "is still not transferring to their cheque-writing hands", with firms reluctant to invest in brands during recession.

The chief executive, Sir Martin Sorrell, said: "The real test may come when governments and independent central banks decide to reduce or withdraw fiscal and monetary support to avoid higher interest rates."