S&P ups WPP outlook to positive

Standard & Poor's said it revised its outlook on WPP Group plc to positive from stable, reflecting progressive improvement in profitability and debt protection metrics.

Subject to continuity in the group's financial policy, current operating performance trends could lead to a one-notch rating upgrade in the medium term, the agency said.

At the same time, S&P said it affirmed its BBB+ long-term corporate credit and senior unsecured debt ratings on WPP while the A-2 short-term corporate credit rating was also affirmed.

The ratings reflect WPP's leading positions in advertising, market research and public relations services, combined with broad geographical, functional and client diversification, S&P said, noting that the ratings are further supported by the group's continuing moderate financial policy, sustainable profitability and the cash-generative nature of the professional services business.

These strengths are tempered by the highly competitive nature of advertising and marketing services, WPP's reliance on key management and creative personnel and the ongoing pressure on the group's clients to optimize marketing spend, the agency added.

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