WPP shares dive as profits plunge

wpp office

Shares in WPP, the world’s biggest ad agency, plunged more than 12% to £7.98 on Thursday after the firm reported a 21% fall in full year.

Revenue for the period came in at £13,234m versus £13,047m for the previous year.

Pretax profit fell 21.9% to £982m from £1,258m in 2018.

However, the company reduced its debt pile by £743m and maintained its dividend for investors at 60p per share.

For the coming year, though, WPP flagged flat revenue growth.

The London listed firm has struggled since losing major clients such as ford Motors nearly three years ago.

WPP strategy

Mark Read, Chief Executive Officer, WPP, said: “2019 was the foundational year for the new WPP strategy. Thanks to the hard work of all our colleagues, we have made substantial progress in a short period of time.

“We said that we would make progress in the journey to return WPP to growth, simplifying our business and reducing our debt. We have delivered against each of these goals – having met our guidance for 2019; achieved our restructuring targets and completed the sale of a majority stake in Kantar.

“The second half of 2019 was stronger than the first, with performance improving globally and in the United States, our largest market.

“Our new offer of creativity powered by technology has resonated with clients, as we’ve seen in good retention rates and important wins.

New assignments

“New creative assignments include Instagram  and Mondelez, and AXA, eBay and Hasbro were among the media wins.

“Perhaps most importantly, our clients and our people tell us that WPP has a clear new sense of purpose and is successfully instilling a culture of creativity, collaboration and openness.

“As we enter the second year of our three-year turnaround plan, our ability to attract and retain the best people is key to long-term growth.

“I am optimistic about the future of our industry and WPP’s position within it, although there is still much more work to do.

“The marketing landscape has never been more dynamic and complex: clients need our help and expertise more than ever.

“With our market-leading scale and global footprint, allied to the creativity of our agencies and our technology leadership, we are confident of further progress against our 2021 targets.”