WPP chief executive officer Sir Martin Sorrell has commented that reported slow revenue growth may be “the first signs of Brexit anxiety”.
Globally, third-quarter reported revenues for WPP were up 3.2% at $3.6bn. However, in the UK, revenue growth was just 2.1% compared to 3.5% in Q2.
Sorrell dismissed sales increases as “false gains” won on the back of the decline of the sterling, which has lost nearly a fifth of its value on global currency markets since the UK voted to leave the EU in June. Sales in Q3 only increased by 7.8% compared to 23.6% the previous quarter.
“If the value of the currency falls, it’s rather like the country’s stock price falling,” Sir Martin said on BBC Radio 4’s Today programme. “We have to watch what impact Brexit is going to have in the fourth quarter.”
“All in all, it’s a good set of numbers in the third quarter, but it’s tough sledding,” he added. “There’s low growth, low inflation, and our clients are very focused on costs.”
In WPP’s third quarter earnings call, Sorrell also discussed the two areas of the world that he believes require greater scrutiny, Japan and the Middle East, potentially in the light of Dentsu’s “inappropriate operations” in Japan.
“I don’t want to say I told you so but I do,” he commented. “We offered to help the ANA; we said if you want to deal with some of the issues in Japan, where there is very little transparency and work with us in the Middle East where there is even less transparency.”
In April, WPP started its search for Sorrell’s replacement as chief executive officer.