(MENAFN- ProactiveInvestors)Global advertising agency WPP (LON:WPP) often regarded as a barometer of economic growth worldwide saw like-for-like net sales growth pick up in the third quarter. Third quarter net sales on a constant currency basis were up 6.1% year-on-year while like-for-like (LFL) net sales were 3.3% higher which represents an improvement on the 2.3% LFL growth seen in the first half of 2015. WPP conceded however that the quickening in the growth rate was at least partly due to softer comparatives. Investec said the LFL growth was slightly below forecasts but noted that full-year guidance of 3.0% LFL net sales growth remained unchanged subject to fourth quarter re-budgeting. WPP said operating profits and operating margins in the first nine months of 2015 were 'well in line with target' with an above target constant currency operating margin improvement of half a percentage point. Digital revenue across the group was up strongly reaching almost 7% on a LFL basis. 'There does seem to be growing client concern around what one in particular calls the three "v"s - value viewability and validation - particularly in relation to on-line video' WPP said. Investec which has an 'add' recommendation said the growth shift to digital and emerging markets was one of the appealing aspects of the stock. Average net debt in the first nine months of 2015 was £3.44bn compared to £3.03bn in 2014 at 2015 exchange rates. Country specific slowdowns in China and Brazil plus geopolitical issues remain top of business leaders' concerns the company said. 'Countries and opportunities like Indonesia the Philippines Vietnam Egypt Nigeria Mexico Colombia and Peru add to opportunity (and maybe even Cuba and Iran will) along with a growing recovery in Western Continental Europe chiefly in Germany Spain and Italy that will strengthen the economic spine. France remains soft although there are some small signs of improvement' the company said. The pattern for next year looks very similar to 2015 but with a boost from maxi-quadrennial events such as the Rio Olympics the US Presidential Election and the UEFA EURO 2016 Football Championships. Historically these events have boosted advertising and marketing services investment by around 1% WPP said. Broker Hargreaves Lansdown said it was a solid third quarter performance from WPP. 'Both the US and Western Continental Europe have provided strong contributions with Advertising and Media Investment Management again the strongest sector' said equity analyst Keith Bowman. 'On the downside easier comparatives look to have played their part a 20% plus share price out-performance against the wider FTSE-100 index over the last year raises some potential valuation concerns while like other global corporations WPP continues to navigate Central Bank generated currency volatility' he added. Russ Mould the investment director at AJ Bell observed: 'The group's shares were down in early trading with investors noting that growth in Asia Pacific Latin America Africa & the Middle East and Central and Eastern Europe at 29.4% was slightly down on year ago and some way shy of the strategic objective of 40-45% over the next five years.' Shares in WPP were down 2.65 at 1441p in late morning trading.
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.