WPP’s Q1 Revenue Was Up 8%, but Holding Company Expects a ‘Demanding Year’ Ahead

With no World Cup or Olympics, growth is harder to come by

The ad industry's largest holding company said its first-quarter profits for 2015 are "well above target" but admitted, "2015 looks to be another demanding year."

WPP Group's reported revenue rose 8 percent in the first quarter to just over $4 billion, with like-for-like revenue, which eliminates the impact of currency and acquisitions, climbing 5 percent. Last month WPP said like-for-like revenue in January increased nearly 7 percent, indicating a slowdown in more recent growth.

WPP posted like-for-like revenue growth in all of its operating regions and business sectors, with the exception of data investment management. The company saw "particularly strong growth geographically" in the U.K. and Asia Pacific, Latin America, Africa, the Middle East, and Central and Eastern Europe. Among its business practices, WPP's major growth increases came from advertising and media investment management; direct, digital and interactive; and healthcare.

The company reported a like-for-like growth of 7 percent growth in the first quarter of 2014, a year that was boosted by spending on soccer's World Cup. While WPP now predicts the pattern for 2015 will look similar to 2014, this year lacks quadrennial events like the World Cup and Winter Olympics to boost marketing investments.The company is forecasting full-year revenue growth of more than 3 percent as opposed to 2014, when WPP said reported revenue rose almost 5 percent to $17.4 billion.

"Following the group's record year in 2014," the company said in its current earnings statement, "2015's first quarter top line growth has been reasonably above budget, particularly given that worldwide (gross domestic product) growth … has slowed in the second half of last year and the first quarter of this year."