WPP cuts sales forecast for year

The advertising budget is one of the first things to be chopped when companies look to reduce costs

WPP said that consumer goods companies in particular have been under "consistent pressure" to get their costs under control, and are now spending less on ads.

WPP appears on track for a hard two years after the world's largest advertising group cut its full-year net sales outlook on Wednesday.

The group has seen a particular slowdown in the United States, where underlying net sales fell by 2.2pc in the first half of the year.

Revenues were GBP7.40 billion, up from GBP6.54 billion reported for the same period past year. It also reported that first-half like-for-like net sales were down 0.5 percent, below a consensus of 0.7 percent growth.

The world's largest advertising group has cut its target for net sales from a revised 2 per cent growth this year to between zero and 1 per cent.

It said: "After another record year in 2016, the group's performance in the first seven months of the new financial year has been much tougher, as worldwide GDP growth... seems to have slowed".

In a statement the group said: "In the previous year or so, growth has become even more hard to find, perhaps due to increasing social, political and economic volatility, for example with the rise of populism typified by surprise election results in the United Kingdom and the United States and bumpy growth in three of the bigger BRIC countries of Brazil, Russia and China, although India continues to develop rapidly".

WPP shares were down 10.81% in the first half hour of trading in London, changing hands at 1,418 pence, its worst one day drop since July 2011.

WPP said a cyberattack in June had not affected revenue or its data and could not be blamed for the slowdown.

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