Advertising giant WPP said 2013 like-for-like revenue growth rose 3.5 per cent as the company lifted its share buy-back target, but admitted currency fluctuations in key markets had hit margins in the second half of the year.The company said it had made a "good start" to 2014, with January like-for-like revenues up 5.7% and net sales up 4.1%.Billings at the Martin Sorrell-led group rose 4.1% to £46bn and revenues increased to £11bn from £10.3bn in 2012. However, a stronger pound in the second half of the year in key markets including Australia, India, Japan, South Africa, Brazil, Argentina and Indonesia, lowered reported margins by 0.2 percentage points and caused the company to miss its margin target.WPP's headline earnings before interest, tax, depreciation and amortisation rose 8% to £1.9bn.The company said it would increase its share buyback programme to 2-3% of the share capital against the current 1%.The news saw a sharp fall in WPP shares and broker Jefferies said the results were a "mixed bag" on first viewing."We like the acceleration in underlying revenue growth, perhaps may have expected a stronger guide as a result, thus either conservative, a positive or cautionary, negative. The margin advance perhaps a little weaker than expected and headline earnings per share expectations may soften as a result. Thus, we see value here, but the stock may give something up in the short term," the broker said.Its analysts maintained a "buy" rating on the stock with a target price of 1425p.Chief Executive Sorrell said that while WPP's clients are "certainly in stronger shape" than since the start of the financial crisis in 2008, they "still lack the necessary confidence given that global GDP growth remains sub-trend".Sorrell said there could be a slight increase in client confidence this year enhanced by the winter olympics at Sochi, the football world cup in Brazil and the mid-term Congressional Elections in the US.He said several "known unknowns" remain, including the potential fragility of the Eurozone, whether or not there would be a hard or soft landing for the economies of Brazil, Russia, India and China, political uncertainty in the UK over EU membership and Scottish independence and the simmering relations between Japan and China."Most, if not all of these markets have suffered a slowdown in 2013 and, following the tapering noises from the US, significant currency weakness, with the exception of China. However, they still remain faster growth markets than the slower growth mature markets of the West," he said.Sorrell said the company remained bullish on China and Russia and expected a boost from Brazil given the country was hosting the 2014 football world cup and the Olympics in 2016."India may be a different kettle of fish. The election may not deliver a clear cut result and although the BJP looks stronger, there will be a coalition, which may result in continued stasis," he said. "However, the continued increase of the hundreds of millions in the new middle-classes in all these countries seems to be the real economic motive force, particularly for the fast-moving consumer goods. We continue to significantly focus our future on the growth of these markets."All in all, 2014 looks to be another demanding year, as a strong UK pound and weak fast-growth market currencies continue to take their toll on our reported operating margins.FP
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