Announcing a pretty respectable 3.8% rise in full-year profits for 2008 – up to £747m - the WPP chief executive said he believed that the market would turn next year, but that it might be hard to spot the difference. ‘There will be a recovery of sorts in 2010, as the massive Keynesian fiscal injections, quantitative easing and interest rate cuts take hold. But it will be against weak comparatives’.
Those who recall the dotcom crash of 2000 will remember that Sorrell likes nothing more than a bit of crystal ball-gazing when the economy hits the buffers. He famously described that slowdown as ‘bath-tub shaped’, but has mercifully refrained form any ablution-related metaphors this time. Presumably because most people don’t have baths, showers, toilets or even main sewers which are sufficiently deep and dark to do justice to our current predicament.
WPP’s sales for the year were up 21% to £7.46bn, and Sorrell declared himself happy with the group’s debt level – up to £1.6bn after the acquisition of TNS late last year.
He was also surprisingly upbeat about the long-term prospects for the ad business, and even had a few crumbs of comfort for beleaguered ITV boss Michael Grade. Telly advertising, he said, is now more affordable and attractive to clients than it has been for years. Although when Martin Sorrell’s sales pitch is that advertising is cheap, you know something must be up.
But Grade shouldn’t spark up a fat Cohiba just yet - things are not only very bad at present but will get worse still before they get better. ‘The first half of 2009 is going to be extremely tough,’ said Sorrell. Job cuts across the group are very much on the cards as a result. ‘I haven’t seen anything like this since the 1970s, when we had the three day week and rubbish piling up in the streets’ he added.
That doesn’t sound like much of a recovery to us, Sir Martin. More like a pitch for a new Keep Britain Tidy ad campaign…
In today's bulletin:
Lloyds nears Government deal - but at what price?
Green shoots 'next year', says WPP's Sorrell
Editor's blog: Goodwin witch-hunt getting out of hand
Cereal offenders cost the UK £22bn
How to say sorry, with YouTube