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Market report: WPP shares near five-year low after sales dip at major rival

WPP shares dropped on its rivals' woes - AP
WPP shares dropped on its rivals' woes - AP

Leaderless ad giant WPP slid back towards a five-year low after a surprise sales dip at French rival Publicis reignited fears over the impact of the EU’s new data protection laws and the sector shake-up caused by Silicon Valley giants.

Ahead of WPP’s next update in September, Publicis blamed uncertainty surrounding new GDPR rules and troubles in its US healthcare business for a 2.1pc decline in revenue in its second quarter.

The slump in trading at the Paris-based rival comes hot on the heels of sinking sales at another of the “big four” marketing firms, US peer Omnicom. Publicis and Omnicom’s sales woes come as WPP also attempts to get to grips with the loss of its talismanic boss, Sir Martin Sorrell.

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Liberum analyst Ian Whittaker called the decline a “bump in the road” but also warned that the results “significantly underperformed expectations”. Two of the big four missing analysts’ expectations will “raise questions again over secular issues”, he added.

Traditional ad firms are being squeezed on two fronts with the likes of Google and Facebook snatching marketing revenue, and consultancies such as Accenture and Deloitte entering the market. With sector warning signs flashing amid fears that WPP has been left leaderless just in time for a crucial review period for big ad spenders, the blue-chip company slipped back 34.5p to £11.41.

Markets Hub - WPP Group
Markets Hub - WPP Group

Elsewhere, Moneysupermarket.com topped the FTSE 250 after inching ahead of City estimates and unveiling plans to enter a joint venture aimed at digitising the mortgage market.

Investors shrugged off a “tinge of weakness” in the company’s third quarter commentary and revenue growth of 6pc was “decent”, Barclays analyst Andrew Ross commented. Moneysupermarket.com closed 19.1p higher at 328.4p, a five-month high.

Investors turned out the lights on LED lights maker Luceco after Berenberg warned that it is “increasingly hard to have any confidence in the near-term earnings outlook”. After an 85pc share price collapse since November, the downgrade to “hold” sent Luceco sliding 1.9p to 40.1p, a new record low.

Royal Dutch Shell “B” brushed aside another dip in oil prices after Credit Suisse upped its price target for the company to £33.50, climbing 33.5p to £27.44.

Equipment rental mammoth Ashtead slid 72p to £23.40 after US rival United Rentals’ margins disappointed investors.

The pound’s slide to a fresh 10-month low helped the FTSE 100 escape a global stocks pullback. Sterling’s losses offset a drop in commodity prices, helping the blue-chip index inch up 7.69 points to 7,683.97.