By Nick Kostov
WPP PLC shares rose sharply after the advertising giant beat sales forecasts and opened the door to asset sales in the wake of founder and former Chief Executive Martin Sorrell's recent, surprise exit.
Alongside its first financial report since Mr. Sorrell stepped down, WPP said it would continue to keep the details of a probe that triggered his departure confidential. Mr. Sorrell resigned abruptly earlier this month after the board investigated what it has described as an allegation of personal misconduct.
Investors, though, focused on the prospect of asset sales and less-dire-than expected revenue. The world's largest advertising company said like-for-like net sales -- a measure used to judge its underlying performance -- declined just 0.1% in the three months to March 31. Analysts were braced for a 1% drop.
The firm said it was keeping its forecast for zero revenue growth this year. Shares shot up as much a 9% in London trading, before falling back somewhat.
Executive Chairman Roberto Quarta has appointed Mark Read, previously chief executive of WPP agency Wunderman, and Andrew Scott, who was WPP's corporate development director and chief operating officer for Europe, as joint-chief operating officers amid a search for a new CEO.
In an interview, Mr. Read said a strategic review is under way and signaled that asset disposals, or selling down stakes in certain businesses, were options.
Since Mr. Sorrell's departure, some analysts have advocated a breakup of the ad holding group. Its market-research unit Kantar has been a particular focus of speculation. Analysts have also pointed to WPP's minority stakes in a number of digital, media and marketing companies, including significant stakes in Vice Media LLC and ad-tech firm AppNexus Inc.
Mr. Read didn't provide specifics, but suggested WPP was looking at a wide range of possible divestment options.
"We've got work to do to accelerate growth," Mr. Read said. "We don't believe it makes sense to break the group up, but we're looking at how we can maximize shareholder value with the assets that we have."
He said that selling down some of WPP's minority stakes were "a logical place to look" to reduce debt. The company has said it wants to bring down its debt-to-core-earnings ratio over the next 12 to 18 months.
"We are going to have a look at the minorities portfolio," Mr. Scott told analysts Monday, but "we're not embarking on a disposal program across the business."
The strategic review comes at a time when WPP's business model is being severely tested and it attempts to quickly fill a leadership gap left by Mr. Sorrell's departure. Marketers are pressuring agency holding companies to revamp organizational structures that are out of step with the digital age. At the same time, marketing clients are cutting back on the fees they pay for ad services or taking more of the work in-house to save money and give themselves greater control.
Ad giants have responded by moving to align different agencies, cut costs and allow clients to work more closely with advertising staff. Adding to those challenges, Ford Motor Co., one of WPP's biggest clients, decided this month to put part of its large advertising account with the company up for review.
WPP reported revenue declined 4% to GBP3.56 billion for the first quarter, pressured by unfavorable currency translation. The company said it won net new business billings of GBP1.74 billion during the period. WPP didn't report full earnings.
Mr. Read said WPP's media buying, digital and public-relations businesses did well, and that the company performed well in the Asia Pacific region and Latin America. He said that North America was the most challenged.
"We need to focus on strengthening our performance in North America, and the creative agencies are the ones most challenged by all the changes going on in our business," he said.
Mr. Sorrell had led WPP since he founded the company in 1986, helping to transform a little-known U.K. wire-shopping-basket maker called Wire & Plastic Products into the largest advertising holding company in the world.
But the business model Mr. Sorrell pioneered -- snapping up an alphabet soup of ad agencies -- is being called into question amid wider industry headwinds. Ad companies recently have also grappled with a scandal over the transparency of the industry's ad-buying practices, and the sector is dealing with the power of tech giants Facebook Inc. and Alphabet Inc.'s Google.
Mr. Read said that Mr. Sorrell "is working well with us on the transition." Mr. Quarta, though, said WPP wasn't obliged to disclose any more detail about the probe that led to his resignation.
He said the matter involved "personal misconduct." That, he said, "is really what we consider a matter of privacy, and therefore a matter for Martin."
Write to Nick Kostov at Nick.Kostov@wsj.com