Via Reuters Finance

LONDON (Reuters) – The world’s biggest advertising company WPP suffered a sharp drop in first-quarter underlying sales in North America as the loss of work from clients such as Ford took a toll on its most important market.

FILE PHOTO: An usher holds a baton to guide attendees towards the AGM of advertising agency WPP in London, Britain, June 13, 2018. REUTERS/Toby Melville/File Photo

WPP, being led by company veteran Mark Read following last year’s departure of founder Martin Sorrell, said its U.S. performance was disappointing but in line with its expectations. It reiterated its full-year forecasts.

The company’s shares, which fell by more than 50 percent between a peak in March 2017 and the end of 2018 before stabilizing this year, were flat in early trading.

WPP, the owner of agencies including JWT, Finsbury and Ogilvy, is in the middle of an overhaul following several profit warnings in 2017 and 2018 and the turmoil linked to Sorrell’s abrupt departure over a complaint of misconduct, which he denied.

The group has been particularly hard hit in the United States, where it lost work from Ford and others in the pharmaceutical and consumer goods sectors in 2018. Its sales there fell by 4.2 percent in 2018.

Read said the British company had appointed new leadership in the United States, merged agencies to better meet the needs of its clients and launched a hunt for new talent on Madison Avenue.

Around three quarters of its businesses in North America now has different leadership from six months ago. “It’s not going to be quick,” he told Reuters. “It takes time for people to have an impact on the business and on clients.

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“(But) we’ve dealt with the losses, we’re appointing new leadership, I feel that the client situation is much more stable. There is much less business under review than there was this time last year.”

As a whole, WPP reported a drop in its main sales measurement of organic revenue less pass through costs of 2.8 percent. It reiterated its full-year forecast of a fall of 1.5 to 2 percent.

Analysts at Citi said that while the sharp drop in the United States would catch the attention, it confirmed its thesis that WPP’s problems were “narrow/deep rather than broad”.

“To put some numbers to this, we think the market should take some comfort from the fact that the business excluding the U.S. actually grew by 0.8 percent in the first quarter,” they said.

To help fund the turnaround WPP has put its data analytics business Kantar up for sale and is looking for a partner to take a majority stake. It said on Friday it was pleased with the level of interest.

Sources familiar with the situation have told Reuters that private equity groups such as CVC, Apollo and Bain have submitted preliminary bids. One person familiar with the situation told Reuters that multiple parties had also been knocked out of the process.

Reporting by Kate Holton; editing by Paul Sandle and Jason Neely