Advertising giant WPP has cut its sales and profit margin forecasts for the second time in two months.
WPP said like-for-like net sales growth and operating margins would now be flat this year, instead of increasing up to 1% and 0.3%, respectively, by the firm predicted in August.
The forecasts, which he said he was going to discuss shortly, is now in its nine-month figures.
It has been said that all of its regions, the united KINGDOM, who has performed the best.
Sir Martin Sorrell, WPP chief executive, told the BBC: “brexit so has actually boosted our business. Clients, instead of investment in fixed capital are investment in the variable costs [of advertising] in an effort to stimulate growth.”
He added that the world was in a “new normal of low growth, low inflation and limited pricing power”, which had exacerbated the emphasis on cost reduction.
The downgraded forecasts sent WPP shares down 1%. They are currently at about a third below their level at the beginning of the year.
The company’s two profit warnings this year have led to significant falls.
He told the BBC the low growth environment has been leading clients to keep a tight control on costs: “Consultants to the clients and suggesting that they are spending too much money across the board.”
Ultra-low interest rates “in the conduct of swimming pools of money in the activist of the investment which, generally, has led to pressure on budgets,” he said.
He also said that Facebook and Google, the growth of platforms for the advertisers, were not a threat to his business, and were, in fact, WPP’s largest destination for investment.Squeeze
Mr. Martin, who has been chief executive officer of WPP for more than 30 years, said that three major upcoming events could help offset the current weak spending environment.
“Any further marketing investment reduction could be countered by the mini-quadrennial events of 2018 – the Olympic Winter games in South Korea; the World Cup in Russia; and the mid-term Congressional elections in the united States.”
George Salmon, an analyst at securities brokers Hargreaves Lansdown, said it was “a difficult year” for WPP.
“The group says the main cause of this slowdown is a change in the habits of spending in the large enterprises.
“Unilever’s focus on margin and Reckitt Benckiser of the zero-based budgeting are two high-profile consumer goods examples, and we can see how this has put pressure on the world’s largest advertising agency,” he added.