By Scott Kanowsky
Investing.com -- Shares in WPP (LON:WPP) slumped towards the bottom of the pan-European STOXX 600 on Friday despite the world's largest advertising group brushing off a darkening economic outlook to raise its guidance for full-year revenue.
The London-based company predicts its main annual net sales measure - like-for-like revenue less pass-through costs - will now grow to a range of 6% - 7%, up by 0.5% from its previous outlook. The decision comes after similar moves by rivals Publicis (EPA:PUBP) and Omnicom (NYSE:OMC).
However, the forecast was under the 8.9% growth in net sales it posted during the first half of the year, hinting at a potential slowdown over the rest of 2022. In the second quarter, revenue jumped 8.3% as strong performance in the U.S. and Germany was partially offset by weakness in China due to recent COVID-19 lockdowns in the country.
WPP, the owner of ad agencies including GroupM and Grey, warned of possible client losses from headwinds linked to factors like the pandemic or the war in Ukraine.
"The Group receives a significant portion of its revenues from a limited number of large clients and the net loss of one or more of these clients could have a material adverse effect on the Group’s prospects, business, financial condition and results of operations," the company said.
However, chief executive officer Mark Read played down these concerns, saying WPP has taken actions to mitigate these risks and is well-positioned to deal with uncertainties ahead.