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WPP weighs on FTSE as weak ads market bites

Shares in advertising group hit after cuts to sales target against backdrop of weak market.

 
WPP weighs on FTSE as weak ads market bites

WPP (WPP) has weighed on the FTSE 100 after cutting full-year sales targets against the backdrop of a weak advertising market.

Shares in the advertising group tumbled 10.9% to £14.17 on the news, holding back the UK blue-chip index, which edged five points lower to 7,377.

The group, headed by Martin Sorrell (pictured), reported like-for-like sales down 0.5% in the first half of the year, and warned sales could fail to grow over the full year.

Steve Clayton, who holds 3.2% of his HL Select UK Growth Shares fund in the stock, said life was 'getting tougher' for media groups.

'It is hard for all players in media-land at the moment; clients are keeping a tight lid on spending and procurement departments are ruthless in the way they push agencies to lower prices.'

Shore Capital analyst Roddy Davidson, who rates the shares a 'hold', acknowledged that 'deteriorating trading conditions are a concern'.

'That said the group's current valuation already reflects a weakening outlook following a period of share price weakness.'

At the other end of the index, shares in Provident Financial (PFG) jumped 18% to 674p but barely made a dent into yesterday's huge share price fall.

Among 'small cap' stocks, shares in EnQuest (ENQ) tumbled  9.9% to 29.5p after the North Sea oil producer cut full-year production forecasts.

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