(Adds quotes, background, reaction)
LONDON, April 25 WPP, the world's
largest advertising group, reported a much better than expected
7 percent rise in first quarter like-for-like revenue growth and
said it had seen a surge in new client wins due to changes in
Martin Sorrell's group, which shocked the market in February
when it lowered its 2014 profit guidance due to fierce
competition, said it had enjoyed strong trading in North America
and Britain and from its advertising and digital media
Profits, revenue margin and gross margin were all above
budget, it said, and it reiterated its margin targets for the
The bullish trading update follows similarly upbeat
statements from rivals Publicis and Omnicom,
which are in the process of merging to overtake the British
group as the world's largest ad firm, and IPG.
WPP has consistently won new clients from rivals since the
two firms announced their intention to merge in July last year
as the planned combination has resulted in conflicts of
interests among their client bases.
WPP's net new business billings were up 57 percent in 2013
and they have won big clients in 2014, including Vodafone
and Marks & Spencer.
As the last big agency to report, the 7 percent organic
growth puts WPP at the top of the pile.
France's Publicis reported revenue growth on a comparable
basis of 3.3 percent, helped by strong digital sales and an
uptick in China and Europe. Omnicom posted sales on the same
basis up 4.3 percent and IPG was up 6.6 percent, with the latter
two benefiting from strong demand in their home U.S. market.
"In terms of the global ad agencies, first quarter growth
demonstrated the expected acceleration and WPP led the pack; for
us the discount to the global agency groups continues not to
make too much sense," Jefferies said in a note to clients.
The only negative comments in the WPP statement resulted
from the as-expected hit from the strong pound, with foreign
exchange rates taking an 8.1 percent hit on revenues at the
The group also noted that its market research business had
slowed in mainland China.
(Reporting by Kate Holton, Editing by Paul Sandle)