- The Brexit vote may have harmed the pound, but it will improve the fortunes of UK-based companies with international clients like WPP, the world’s largest marketing company by revenue.
- WPP expects an improved next 18 months due to the Brexit effect as 85% of its revenue comes in foreign currencies.
- WPP told analysts it’s forecasting a 13-15% increase in revenue for the second half of 2016 due to foreign exchange effects, according to the Wall Street Journal.
The Brexit's impact on advertising is only just starting to show up. But WPP, whose CEO Martin Sorrell was publicly against the Brexit, has seen positive results due to most of its business coming internationally. Strong revenue abroad has translated well due to the weak pound.
While WPP was hit with a 57% decline in net profit over the first half of the year, that comes as a result of a major investment in comScore, which has yet to report its results due to an internal investigation. CEO Martin Sorrell said the firm expects a weaker second half because it reported a strong comparative period last year. WPP’s shares are up 18% this year, ahead of competitors such as Omnicom and Publicis. The firm expects a comparable net growth in sales of more than 3% in 2016.
Despite the initial positive impact for the firm, Sorrell said that the uncertainty caused by Brexit is a concern, along with low growth in the Eurozone and issues in emerging economies like China, Brazil and Russia. “Uncertainty is the death knell to growth and people willing to take an educated risk," Sorrell said about the Brexit vote and the process of untangling the UK from the EU.