WPP has reported a slowdown in trading in the first quarter as like-for-like sales growth dipped to 2.5%, but said that the business remains on track to hit full-year targets.

The world’s largest marketing services group, which saw its share price dip by 2%, or 31p, to 1,565p in early trading, reported revenues of £2.78bn in the first three months of the year.

WPP had reported net sales growth of 3.9% in January, meaning growth slowed in February and March.

The company reported growth of 3.8% in the first quarter of 2014, a year that was boosted by spending on the football World Cup.

Sir Martin Sorrell, the WPP chief executive, said that first-quarter profits and operating margins are “well above target”, despite the growth slowdown, and ful-year targets remain unchanged.

“Early indications are that full year like-for-like revenue and net sales growth will be up over 3%, with a stronger second half, partly the result of easier comparatives,” he said.

WPP’s results follows better than expected first-quarter growth of 0.9% reported by French rival Publicis, which has struggled following its aborted merger with Omnicom. US group Omnicom reported like-for-like sales revenue growth of 5.1%.

Sorrell said that WPP’s reporting of a net sales growth figure is more accurate – a measure that its rivals do not report – and that, using the same measure as its rivals, its first quarter revenue growth was 5%.

WPP’s first quarter was driven by like-for-like net sales growth of 2.1% in North America, the group’s largest market, and 3.6% in the UK. Western continental Europe showed an overall recovery with net sales up 0.3% in the first quarter.

Sorrell, who received a £36m share payout for last year, also reiterated his warning that the election is likely to be bad for business.

“On the one hand if you have Labour coalition you have a coalition not as favourable to business – supposedly,” he said. “A Conservative coalition might be more favourable to business, but there will be a European referendum which will cause uncertainty.”

Net new business in the quarter was $1bn, a decline of 22% over the same period last year.

WPP also said that staff numbers dropped by 1.9%, or 2,407, in the first quarter. This was partly to do with 1,200 staff transferring to IBM in February and March as part a strategic partnership agreement and IT transformation programme.