It would be dangerous to make predictions

Sir Martin Sorrell

Although, taking into account new businesses acquired by the group, the fall in revenues was 2%.

The biggest downturn was in North America.

Tough conditions

Sir Martin Sorrell, chief executive of WPP, said he could see no sign of recovery in the advertising market.

"I hope it's bottomed out, but whether it has or not is another story," Sir Martin said.

"It would be dangerous to make predictions."

WPP's smaller rival, Cordiant, announced that its profits had more than halved.

Difficult to forecast

Cordiant said it would not be paying a dividend to its shareholders and it warned that conditions would be tough in the coming year.

Michael Bungey, chief executive of Cordiant, said he expected revenues in the industry as a whole to fall by 2% this year.

"It is very difficult to forecast when there is going to be an upturn," Mr Bungey said.

"Some people are talking about the third quarter, right now we can't see that far forward," he added.

The advertising industry suffered in 2001 because of the collapse of the dot com sector, the economic downturn and the effects of the 11 September terrorist attacks.

In the City, Cordiant shares, which plunged to 71.5p in early trade, recovered to close down 2p at 78p on Monday.

WPP stock ended 6.5p lower at 770p.