Shares in advertising firm WPP at record high after rise in pre-tax profit
WPP shares hit an all-time high after the advertising giant reported a 15.8% rise in pre-tax profit and said Brexit will not hinder its growth strategy.
The company's shares rose to the top of the FTSE 100, rising about 6% to hit a fresh record high of 1875p.
Headline pre-tax profit beat expectations at £690 million while like-for-like net sales grew 3.8% for the six months to June 30.
Analysts had forecast a 13% hike in pre-tax earnings to £755 million and a 3.2% rise in like-for-like net sales.
However, the company was stung by a £122 million writedown linked to its investment in analytics firm comScore. That compared with "exceptional gains" of £203 million during the same period last year, the group said.
The company said the European Union referendum vote had not hindered its growth strategy.
"Particularly, following Brexit, accelerated implementation of growth strategy continues, with revenue ratios for fast growth markets and new media raised from 35-40% to 40-45% over next four to five years," the report stated.
However, WPP's net assets took a hit from the weaker pound, which plunged in the wake of Brexit.
As a result, return on equity was down to 15.5% from 15.9% in the 12 months to June 30, compared with the same period last year.
WPP said it expects weaker figures for the remaining six months of the year but suggested this had more to do with strong comparative performance in 2015.
Roddy Davidson, an analyst at Shore Capital Markets, called WPP's interim earnings results "robust".
"We are encouraged by the positive trading performance and operational momentum revealed in this morning's results," Mr Davidson said.
"We remain bullish on WPP's ability to capitalise on a solid medium-term outlook for global advertising spend - particularly in view of its concerted efforts to build an overweight exposure versus its peers to digital disciplines and faster growing regions, which should also help cushion regional variations and short term volatility in advertising spend," he added.