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Advertising giant WPP (LON:WPP) warned of ‘tepid’ economic growth moving into 2017, provoking negative investor sentiment and sending shares down over 6 percent.
The company forecast just 2 percent growth for 2017, down from 3 percent the year before.
The preliminary figures were boosted by ‘strong currency tailwinds’, reporting a 17.6 percent rise in revenue to £14.389 billion and a 26.7 percent increase in pre-tax profit to £1.891 billion.
However the firm, which owns agencies including Ogilvy & Mather and Hill & Knowlton, reiterated that the positive results may be set to take a negative turn going into 2017.
In a statement, the company said:
“Given continued tepid economic growth and recent weaker comparative net new business trends, the budgets for 2017, on a like-for-like basis, have been set conservatively at around 2 percent for both revenue and net sales”
CEO Martin Sorell moved to calm investors on a call by saying that “At a time when all external pressures seem to call for instant, short-term responses, an understanding of the value of confidence, consistency and continuity has never itself been more valuable.”
Advertising has grown increasingly competitive in recent years, with a saturated market and clients who are looking to cut costs. WPP’s 2 percent growth forecast came in below analysts’ expectations.
Shares in WPP are currently trading down 5.91 percent at 1,798.00 (0945GMT).