Martin Sorrell: Seeing "signs of stabilisation"

WPP - whose agencies include Young & Rubicam and J Walter Thompson - said reported revenues fell to �908.5m ($1.45bn) in the quarter, down from �945.8m in the same period last year.

On a like-for-like basis - which strips out the effects of acquisitions and currency movements - revenues were unchanged.

The company said operating margins had improved on last year and added it had won �410m ($660m) of new business billings during the first quarter.

The like-for-like revenue figure was better than analysts' expectations of a slight fall, and WPP shares rose 3.2% to 437p in early trade on the London market.

'Encouraging' trend

The advertising industry has been going through a tough couple of years as the global economic slowdown has caused firms to cut their marketing and promotional budgets.

But WPP chief executive Martin Sorrell said there are now signs that the downturn is bottoming out.

"We are seeing significant signs of stabilisation," Mr Sorrell said on the television station, CNBC.

"The trend of the first quarter is a little encouraging, but 2003 will continue to be difficult."

He repeated his view that revenues will remain flat this year, but will start to recover in 2004.

WPP's trading statement said revenues in North America rose for the second quarter in succession.

UK revenues were down by 3%, but revenues from continental Europe and its interests elsewhere in the world grew by more than 3%.