WPP: Danger looms ahead for UK
Despite posting a 12 per cent rise in profits for last year (to £1.45bn), the advertising colossus used its outlook statement to express disquiet about the years ahead.
Noting that whether the Conservatives “win outright, lead a coalition or even form a minority government” there will be a referendum on Britain’s membership of the European Union within 1-2 years of the election – and this will cause “significant uncertainty.”
Conversely, however, if Labour forms the next government in some form, WPP believe the victory will be based “partly on a business bashing manifesto.”
“Either way,” the statement concludes “the next government is on course to slow the UK’s economic momentum.”
Commenting on the company’s results, WPP chief executive Martin Sorrell said that the prospect of cost cutting among WPP’s consumer-focused and retail clients “keeps me awake at night.”
“Packed goods companies and consumer goods companies have pressure on the top line, with little or no inflation to raise prices. But you can’t win by carrying on cutting costs.”
Richard Hunter of Hargreaves Lansdown said the results had “again surpassed expectations”, “with improvements across the board.”
The results indicate that earnings per share, return on capital, margins and profits were all up last year. Following the release, WPP shares were up by 14p (at 1,555p).