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World's largest advertising firm is facing a rough year — and it's blaming the shortcomings of the Trump regime

  • The advertising firm reported first-half like-for-like net sales down 0.5 percent, below a consensus of 0.7 percent growth.
  • Despite the slowdown, the group reiterated its target for a 0.3 point improvement in its operating margin.

WPP appears on track for a difficult two years after the world's largest advertising group cut its full-year net sales outlook on Wednesday.

The company blamed weak trading in the United States and "bumpy" growth in Russia, Brazil and China for a marked deterioration in the second-quarter.

In the earnings report, the group cut its full-year target to between 0 and 1 percent growth, from a previous forecast of 2 percent. It also reported that first-half like-for-like net sales were down 0.5 percent, below a consensus of 0.7 percent growth. CEO Martin Sorrell said that 2018 is "unlikely to be much different."

"Whilst Trumponomics may well have resulted in an increase in the United States GDP (gross domestic product) growth rate with the United States the biggest ($18 trillion) GDP engine out of a total of $74 trillion worldwide, the limitations of the new administration seem to be jeopardizing the anti-regulatory, infrastructure and tax reduction program that was promised."

Speaking to CNBC on Wednesday morning, Sorrell added: "It's been a tough first-half ... The weakest for us was the U.S. which I think was pretty much the case across the industry."

Despite the slowdown, the group reiterated its target for a 0.3 point improvement in its operating margin.

The group recorded net sales growth of 3.1 percent in 2016 though the target for 2017 was revised down to 2 percent in order to reflect "tepid" economic growth and weaker net new business trends. Its shares slumped more than 11 percent in morning deals.

Total group revenue rose to £7.4 billion ($9.48 billion) for the six months through to June, up from £6.5 billion for the same period last year. Pre-tax profits were also up by more than 50 percent, to £779.2 million.

WPP had previously rattled investors in March when the company also announced it had cut its sales forecast for 2017. It cited an ultra-competitive environment in which rivals were having to scrap for every dollar of ad spend.