Global advertising firm WPP has slashed its dividend after it reported a 48% decline in profits for the first half of the year.
Reported revenue of £6,663m for the half year was down 7.8%, with a LFL decline of 2.4%, and reported operating profit was £221m down 47.8%, but this included a goodwill impairment of £116m, the media, PR and advertising firm said in its trading statement issued via the Regulatory News Service at the London Stock Exchange.
FTSE-100 listed WPP saw its shares shed just over 4% of their value following the results on Thursday morning to trade at £3.84 per share. The shares have fallen almost 70% from their peak of £12.14, back in February 2022.
WPP trading update
WPP said that its top 25 clients held broadly flat at 0.1% LFL growth in the first half. While Tech & Digital Services, Automotive and Healthcare client sectors were stable across the period, the company did see more pressure in the second quarter with LFL declines across all three. CPG, having been stable in the first quarter, also saw a LFL step down in Q2.
As the tough times continue for the company, the Board decided to set the interim dividend at 7.5p (H1 2024: 15.0p).
Mark Read, Chief Executive Officer of WPP, said: “It has been a challenging first half given pressures on client spending and a slower new business environment. We have, however, made significant progress on the repositioning of WPP Media, simplifying its organisational model to increase effectiveness and reduce costs.
“Meanwhile, the acquisition of InfoSum, the launch of Open Intelligence and the continued adoption of WPP Open all strengthen our data and technology capabilities.
“The Board is declaring an interim dividend of 7.5p ahead of a review of the strategy and future capital allocation policy which will be led by Cindy Rose, who succeeds me as CEO on 1 September.
“The priority is to drive sustainable growth supported by an appropriate level of financial flexibility while balancing returns to shareholders.
“WPP is a company with enormous strengths in creativity and media, technology and AI, talented people, deep client relationships and unmatched global reach.
“Throughout my seven years as CEO, technological innovation has been a constant and I believe that thanks to our investment in AI we can look to the future with confidence.
“I would like to thank our clients for their partnership and our people for their dedication and I wish them, and Cindy, every success in the future.”