But analysts at Liberum said the sales slowdown in the second quarter meant it was now “questionable” whether the company was going to reach its full-year guidance, “especially given recent China newsflow”.
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Concerns over growth in the world’s second-largest economy has led to a crash in Chinese stocks which has caused shockwaves across global markets.
BHP Billiton’s investment-grade credit ratings might come under pressure in the current financial year, ratings agencies said on Wednesday, after the top global miner posted its weakest profit in a decade but still hiked dividends. “Concerns about China – aggravated by the recent devaluation and stock-market decline – and Brazil remain, although we remain unabashed bulls of both”.
It could also accelerate the rise of quantitative marketing he has previously bemoaned, with business leaders increasingly cautious about geopolitical issues such as the impact of sanctions on Russian Federation, the potential that Britain could exit the European Union and Greece’s withdrawal from the Eurozone. The emerging markets collectively known as the Brics – Brazil, Russia, India and China – are struggling to grow fast enough, which slowed the performance.
WPP Plc, the world’s largest advertising company, said first-half sales increased 6.8 percent as business from existing clients picked up in North America.
The UK was the best performing region, with sales up 6.3% on a comparable basis in the half-year, against 5.9% in North America. Across the world, the group employs some 179,000 people in 111 nations, operating a variety of agencies, including J Walter Thompson and Ogilvy & Mather.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said that WPP’s strategy continued to deliver rewards, “both in terms of where it has been and where it plans to go”.
The group expects little change over the remainder of “another demanding year” though voiced some optimism for advertising spend in a 2016 that will be boosted by the Rio Olympics, the Uefa Euro 2016 Football Championships and the US Presidential Election.
Sir Martin told BBC Radio 4’s Today programme he remained a “raging bull in relation to China”.
“Be careful what you wish for”.
In an interview with CNBC, Sir Martin added, “There are worries about the slowing of growth, but that was inevitable”.
Sir Martin described events in China as a “correction”.
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“They’ve had 30 years of growth and expansion, and hundreds of millions of people have been taken out of poverty and moved into a lower-middle or middle class”.
