WPP revenue grows but big tech firms cut back spend
Revenue grew by 4.9% at ad behemoth WPP, but it noted that some major US tech firms cut back spend.
Revenue came to £2.8 billion as the group one new contracts with firms such as Adobe, Ford, Maruti Suzuki, Mondelēz and Swissport.
However, it noted that “lower spend from some technology clients” hit its revenue in the US.
The group has also upped its focus on AI, which it used to create persoanlised ads inn India during the quarter.
“Our focus on AI over the last five years is paying off, with many examples of our work with clients, using the main AI platforms, in-market today,” CEO Mark Read said.
“We remain on track to deliver our full year guidance, thanks to the competitiveness of our offer and our role as a modern, trusted partner to clients in a world further disrupted by technology.”
Deutsche Bank reports quarterly profit worth almost £2 billion
Deutsche Bank reported a quarterly profit worth over £1.7 billion pounds today, for a period during which the German financial titan was briefly at the centre of worries about a new financial crisis.
The cost of insurance against default of its debt spiked higher in the first quarter after the government-brokered merger of Credit Suisse and UBS sent shockwaves throughout the global banking sector.
Today, Deutsche reported its eleventh consecutive quarter of profit growth, with profit before tax up 12% year-on-year to €1.9 billion. Net profit rose 8% to €1.3 billion.
James von Moltke, chief financial officer, said: ““In the first quarter, we again proved the strength and resilience of Deutsche Bank in challenging conditions.”
AstraZeneca eyes expansion in China amid dip in sales
AstraZeneca is eyeing expansion in China as the firm looks for new growth opportunities amid a decline in revenues.
The pharma giant announced new investment to build a manufacturing plant in Qingdao city to produce inhalers for COPD patients in China, a new partnership with Shandong province to establish an innovative rare diseases diagnosis and treatment hub, as well as a partnership with the Chinese Red Cross Foundation.
Total sales fell 4% to $10.9 billion in the first quarter of 2023, thanks in large part to a $1.5 billion drop in Covid-related medicines.
CEO Pascal Soriot said: “Our performance in emerging markets was particularly strong and I am impressed by the growth and pace of innovation I see in China, which underscores the competitive advantage of our leading presence in this country.”
FTSE 100 seen lower, focus on US GDP
Brent crude futures stand at $78 a barrel this morning after recession fears caused the benchmark to slide by about 4% yesterday.
The uncertain economic outlook also contributed to a downbeat session on Wall Street, where the S&P 500 index finished 0.7% lower despite the confidence boost of better-than-expected earnings updates from Alphabet and Microsoft.
Risk sentiment continues to be driven by developments in the banking sector, with First Republic shares down another 30% and the wider industry benchmark of major lenders down for a fifth day in a row.
Investors fear that troubles in the regional banking sector will spread and that tighter lending conditions could also slow the US economy.
The focus now turns to this afternoon’s first quarter GDP reading, where expectations are for the US economy to have slowed from 2.6% in the fourth quarter to 2%.
The FTSE 100 index fell 0.5% yesterday and is forecast by CMC Markets to open 25 points to 7827.
Higher prices drive Unilever turnover growth
Unilever’s sales grew by 10.5% in the first quarter at Magnum-to-Marmite maker Unilever, a rise driven entirely by pricing growth.
Turnover came to €14.8 billion, thanks to pricing growth of 10.7%.
“Unilever has had a good start to the year, delivering another quarter of strong topline growth. Underlying sales growth accelerated to 10.5%, driven by price growth in response to continued high input cost inflation and an improved volume performance,” CEO Alan Jope said.
The increased sales come as the business expects an inflation hit to costs of €1.5 billion for the first half of the year.
Taylor Wimpey says ‘challenges’ remain for first time buyers as overall demand recovers
FTSE 100 housebuilder Taylor Wimpey said today that first-time house buyers still face “challenges” as demand for new houses continues to recover from the low levels hit last year after the mini-Budget hit the market.
Jennie Daly, chief executive, said “good mortgage availability” was supporting the recovery, although the company remains “cautious of continued macroeconomic uncertainty”.
Its cancellation rate for the year to April 23 ticked up to 15% from 14%. It also said annualised cost inflation “remains high but is beginning to moderate from the 9-10% we reported in March,” in a trend it expects to continue.
Taylor Wimpey expects to complete between 9,000 and 10,500 homes in 2023, as “customer interest continues to recover”.
Sainsbury’s profits at top end of guidance
Supermarket giant Sainsbury’s today revealed underlying profits of £690 million for the year to 4 March.
The figure is down 5% on a year earlier due to the previous year’s Covid boost to grocery volumes, as well as investment in the customer offer and operating cost inflation.
However, the profits haul is at the top end of the company’s £630m-£690m guidance and also 18% higher than its pre-pandemic level.
Revenues rose 5.4% to £35.1 billion, which includes like-for-like grocery sales growth of 7.4% in the final quarter as food prices soared. General merchandise sales fell 0.4% but Sainsbury’s said its Argos division gained share in a weak market.
Chief executive Simon Roberts said: “Our focus on value has never been greater and we have spent over £560 million keeping our prices low over the last two years.
“As a result, we are now the best value compared to our competitors that we have been in many years and we are delivering improved market share performance in Sainsbury’s and Argos.”
Credit impairment charges more than triple to top £500 million at Barclays
Credit impairment charges — a measure of how much a bank sets aside to cover debt write-offs — has more than tripled at Barclays to top £500 million in signs more and more account holders are getting into credit card debt amid cost-of-living pressures.
The charges rose to £524 million for the first three months of 2023, up from £141 million a year earlier. Barclays said the increase was as a result of “higher US cards balances” and “the continuing normalisation anticipated in US cards delinquencies.”
The British bank delivered first-quarter pre-tax profits of £2.6 billion, up 16% on last year, while income rose 11% to £7.2 billion.
CEO C. S. Venkatakrishnan said: “All three businesses have performed well with high quality income growth and double-digit returns. The momentum across the Group allows us to maintain a robust capital position, deliver attractive returns to shareholders, and support our customers and clients through an uncertain economic environment.”
Meta shares get a lift after first quarter revenue beat expectations
Shares in Meta surged as much as 11% in aftermaket trading as the Facebook and WhatsApp owner posted first quarter revenues that surpassed analyst expectations.
The social media giant posted sales of $28.65 billion, almost a billion dollars more than the $27.67 billion estimated by analysts.
The firm’s advertising revenue was boosted by the growth of ad impressions, which rose 26% year-on-year.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Meta has seen its valuation receive another injection of goodwill as investors breathe a sigh of relief at the sight of a growing advertising revenue line.
“This surprise advertising recovery could suggest consumer behaviour isn’t slowing down as abruptly as thought, helping businesses to up their spending.”