WPP Plc, the world’s largest advertising and marketing services company by sales, reported a jump in full-year profit and revenue Friday, helped by increasing spending on advertising by its North American customers. The agency also registered a strong start to 2016 but outlined several economic and political risks that could force advertisers to scuttle new growth in favor of cost cuts to reach profitability targets.
Listing the main concerns faced by the company, CEO Martin Sorrell noted that a continuing crisis in Ukraine, political instability in the Middle East and North Africa, and the possible exit of the U.K. from the European Union could negatively affect revenues in 2016.
“The always on, Don Draperish, general industry optimism seems misplaced,” Sorrell – known for his colorful economic predictions – said during the investor call Friday, referring to the protagonist of the popular American period drama TV show “Mad Men.”
Sorrell’s comments echoed concerns raised by WPP’s main rivals in Europe in recent weeks. CEO of Publicis Groupe SA and Maurice Levy said he is aiming for his company to post “modest growth” in 2016, while Havas SA said it is budgeting for a year of slower growth, according to the Wall Street Journal.
On Friday, London-based WPP said full-year net profit rose 7.7 percent to 1.16 billion pounds ($1.64 billion) in the year to Dec. 31 as sales increased 6.1 percent to 12.2 billion pounds ($17.3 billion) helped by robust demand from North America and the U.K.
Comparable net sales, also known as like-for-like sales -- a metric used to gauge sales growth without the effects of acquisitions, disposals and currency effects -- rose 3.3 percent in the year.
The company, which owns brands like Young & Rubicam and Ogilvy & Mather, reiterated its forecast for the full-year 2016 and said it expected comparable net sales to be well over 3 percent compared with growth of 3.3 percent in 2015.
Correction: An earlier version of this story gave an incorrect description of WPP's nature of business and the location of its headquarters. The company is into advertising and marketing services, and is based in London.