WPP share price: Forex headwinds bite into revenue
WPP (LON:WPP) has updated investors on its first-quarter performance this morning.
**Highlights from the company statement:**
Revenue growth of 10.5%, with constant currency growth of 9.0%, like-for-like growth of 5.1%, 3.9% growth from acquisitions and 1.5% from currency, reflecting the weakness of sterling against the US dollar and the euro.
Net sales growth of 8.1% in sterling (up 2.2% in dollars, up 4.0% in euros and down 1.3% in yen), with constant currency growth of 6.7%, like-for-like growth of 3.2%, 3.5% growth from acquisitions and 1.4% from currency
Like-for-like revenue growth in all regions and business sectors, characterised by particularly strong growth geographically in the United States, strong growth in the United Kingdom and Western Continental Europe and functionally in advertising and media investment management and sub-sectors direct, digital and interactive.
Net new business of $1.779 billion in the first quarter, compared to $1.0 billion in the first quarter last year, with the Group continuing to lead net new business league tables.
**Current trading and outlook:**
FY 2016 quarter 1 preliminary revised forecasts | Similar to budget, with like-for-like revenue and net sales growth up over 3% and a headline net sales margin target of 0.3 margin points improvement on a constant currency basis.
Dual focus in 2016 | 1. Stronger than competitor revenue and net sales growth due to leading position in faster growing geographic markets and digital, premier parent company creative and effectiveness position, new business, horizontality and strategically targeted acquisitions; 2. Continued emphasis on balancing revenue and net sales growth with headcount increases and improvement in staff costs/net sales ratio to enhance operating margins.
Long-term targets | Above industry revenue and net sales growth due to geographically superior position in new markets and functional strength in new media and data investment management, including data analytics and the application of new technology, data and content; improvement in staff costs/net sales ratio of 0.2% per annum or more depending on net sales growth; net sales operating margin expansion of 0.3% margin points or more on a constant currency basis, with an ultimate goal of almost 20%; and headline diluted EPS growth of 10% to 15% per annum from revenue growth, margin expansion, strategically targeted small and medium-sized acquisitions and share buy-backs.
As of 07:25 BST, Thursday, 28 April, WPP PLC ORD 10P share price is 1,616.00p.
