August 29, 2013 / 7:44 AM / 4 years ago

WPP improves outlook for 2013 as revenue picks up

WPP CEO Martin Sorrell attends a TV show during the annual meeting of the World Economic Forum (WEF) in Davos January 23, 2013. REUTERS/Pascal Lauener

LONDON (Reuters) - WPP (WPP.L), the world’s biggest advertising agency, improved its outlook for the full-year on Thursday as it reported a 5 percent rise in like-for-like revenues in July, its strongest monthly rate this year.

The company, which is set to be overtaken in size by the merger of rivals Publicis (PUBP.PA) and Omnicom (OMC.N), said the second half of 2013 would be stronger than the first six months and it expected like-for-like revenue and growth to now top its previous forecast of over 3 percent.

“We’ll see how it pans out,” chief executive Martin Sorrell said in an interview, declining to be more specific on the year forecast.

“We are running at 2.8 percent by the end of the seventh month, and if your target is 3 or 3 plus, you are well positioned for the other five months on the assumption we continue to grow. So I think we feel good.”

WPP confirmed its headline operating profit target of 15.3 percent for the year, up 0.5 percentage points.

The London-listed group posted a 7.1 percent rise in first-half reported revenue to 5.3 billion pounds ($8.23 billion), and a 12 percent rise in headline pre-tax profit to 524 million pounds, broadly in line with market forecasts.

Like-for-like revenue was up 2.4 percent in the first half.

WPP said it was benefiting from consolidation trends in the industry, winning assignments from existing and new clients, which would be seen in group revenues later in 2013 and 2014.

The group saw strongest revenue growth in Britain in the second quarter, up 5.4 percent on a like-for-like basis, while Western Continental Europe continued to be the weakest region, with like-for-like growth down 1.2 percent.

Shares in the group were up 1.9 percent at 1,200 pence by 0710 GMT.

Analyst David Reynolds at Jefferies said WPP was “navigating a difficult year well” with organic growth hitting estimates at 2.4 percent.

“Much remains to be done to execute a second-half weighted full year, but commentary around July revenues (...) bodes well,” he said. ($1 = 0.6437 British pounds)

Reporting by Paul Sandle, Editing by Belinda Goldsmith

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