New contract wins help WPP to improved second-quarter trading
Mark Read, CEO of WPP Group, the largest global advertising and public relations agency, poses for a portrait at their offices in London, Britain, July 17, 2019.

New client wins including Instagram and eBay helped WPP report better-than-expected trading in the second quarter, giving a lift both to its shares and the boss of the world's biggest advertising company.

Mark Read, who took over from founder Martin Sorrell last year, has been working to simplify the group by merging agencies and changing incentive schemes after clients complained the owner of Ogilvy, Grey and Finsbury had become too unwieldy.

The British company said on Friday its key sales measure - organic growth less pass-through costs - fell 1.4% in the second quarter, beating the 3% fall expected by analysts.

It was also an improvement on a fall of 2.8% in the first quarter and enabled WPP to reiterate its full-year outlook.

The stock, which had slumped earlier this week to a near four-month low, jumped as much as 10% in early trading and by 0845 GMT was up 6.3% at 973 pence.

"We believe that we have the right strategy," Read told Reuters. "There will be twists and turns on the way but we set out a three-year plan and I would say we're now more confident that it's the right plan."

WPP is in the middle of an overhaul after the loss of key clients and work led to several profit warnings in 2017 and 2018, the same year Sorrell quit over a complaint of misconduct, which he denied.

Shares in the company fell 60% between March 2017 and March 2019 as it lost work from clients including American Express, United Airlines and Ford - a partner for 75 years.

The stock is up 20% since then, slowly closing the valuation gap with U.S. rivals Omnicom and Interpublic which have performed more strongly in recent years.

"The investment case at WPP is all about the multiple where the significant discount the group suffers vs peers ... is entirely down to the perception that WPP's growth has permanently diverged from the peers," analysts at Citi said.

"With this in mind we think results will be taken well," noting WPP had been trading on just nine time prospective earnings against 11 to 13 for its rivals.