WPP ravaged by strong pound

Sir Martin Sorrell, WPP's chief executive, said the group had enjoyed underlying growth in all its international markets, with a particularly good performance in the UK, North America and Asia Pacific. Revenues in Britain were up 17.2pc, better than any other territory, even when the impact of sterling was included.

He warned that the "continuing fragility" of the eurozone, particularly France and Italy, and the slowdown in emerging markets was a concern, however, and that wars in the Middle East and Eastern Europe were causing brands to be cautious about their advertising spending.

He said: "All in all, whilst clients may be more confident than they were in September 2008, they broadly remain unwilling to take further risks, particularly given so many political flash points.

"They understandably, but perhaps inadvisably, remain focussed, on achieving their profitability objectives by cutting costs, rather than by growing the top line."

Sir Martin suggested that the recent rash of major takeovers and attempted takeovers, has in part been driven by boards recognising that costs have been cut as far as possible, with acquisitions offering a route to growth.

WPP said it had outperformed its rivals, such as Publicis and Omnicom, who themselves failed to seal a merger in May, thanks to its greater strength in the faster growing emerging markets and in digital advertising, to which brands are increasingly diverting spending.

Sir Martin said: "All in all, however, on a reportable basis, 2014 looks likely to be another demanding year, as a strong United Kingdom pound and weak faster growth market currencies continue to take their toll on our reported results."

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