Ad Giant WPP Benefits From Brexit As Weak Pound Boosts Results
WPP Plc, the world’s largest advertising company, benefited from the U.K.’s vote to leave the European Union in the first half of the year as a favorable currency translation more than offset Brexit’s drag on the British economy.
London-based WPP, which owns ad agencies Ogilvy & Mather, JWT, Y&R and Grey, said Wednesday profit before interest and taxes rose 15 percent to 769 million pounds ($1 billion) in the six months ended June 30. Revenue rose 12 percent to 6.5 billion pounds.
The company’s results were lifted by account wins and stronger ad buying in Europe in the run-up to the Euro 2016 soccer tournament. While some U.K. clients exercised caution in advance of the June 23 Brexit referendum, the plunge in the pound that followed boosted WPP’s overseas earnings when converted into the U.K. currency.
In constant currency terms, profit before interest and taxes was up 10 percent, showing the effect of the weak pound.
Despite the currency benefit, WPP said the Brexit vote was one of a range of factors contributing to uncertainty among consumers and corporate leaders. It “may result, at least in the short-term or mid-term, in GDP weakness in the United Kingdom, the EU and possibly globally, let alone further political and economic uncertainty in the United Kingdom around Scottish independence and further possible disintegration of the EU,” WPP said in a statement.
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