WPP AUNZ boss warns investors of further ad spend declines
Interim CEO of WPP AUNZ John Steedman has warned investors the company’s anaemic performance will continue as weak ad spend continues to hurt the Australian marketing industry.
Steedman’s comments at the holding group’s Annual General Meeting yesterday came after reporting a 12.8% fall in earnings before interest and tax and a 4% sales decline in the second half of 2018.
John Steedman is to continue as WPP AUNZ interim CEO for at least another month, investors were told at the company’s AGM
“Our 2019 budget was for underlying earnings per share to be flat against the prior year,” Steedman said.
“The outlook has been reaffirmed by our recently completed Q1 forecast. The first quarter actual trading results are ahead of our internal forecasts, but behind the year prior, primarily as a result of the weak media expenditure and flow through impact of weak media expenditure and the flow through impact of contract losses of last year.
“I note the overall media spend in the first quarter is expected to be down circa 7%. Importantly the first quarter is always by far our smallest quarter for the year.
“We expect our half year results to be weaker than the previous corresponding period at both the net sales and underlying earnings per share lines as the drivers of our first quarter performance continues to play out.”
Steedman however told investors WPP AUNZ was progressing well on simplifying its offerings to customers in line with the global groups’ consolidation of agencies which has seen mergers of the iconic JWT with Wunderman merge to form Wunderman Thompson and VML with Y&R to create VMLY&R as the group brands itself as a ‘creative transformation company’.
“Moving forward, navigating WPP AUNZ for our clients must be more streamlined, more effective and therefore faster,” Steedman said.
“Chief Marketing Officers and the C-Suite in general, are seeking agility and responsiveness when it comes to their marketing needs. We have a strong team at the centre, working with our operating companies on a daily basis, myself included. To this team we have recently added Sunita Gloster, who has joined us in her role as Chief Customer Officer.
“This is a very important role for us and will allow us to react more quickly, to our clients changing
needs and get closer to their business.”
Gloster, former chief commercial and strategy officer at Ten, joined WPP in November last year after serving ten months with PwC as head of its CMO advisory practice.
At the time of her appointment, Steedman said: “Having Sunita focused on and championing our clients’ needs will be beneficial across all our partnerships.”
Steedman’s tenure as interim CEO following the shock departure of long standing boss Mike Conaghan last October is to continue with chairman Robert Mactier telling investors: “An extensive search has been undertaken locally and globally to identify a new CEO with the background and capabilities to help drive our transformation and to firmly position WPP AUNZ as the respected thought leader and ‘go to’ company in the industry.
“We have been very pleased with the quality and the breadth and background of the candidates we have considered. The search is drawing to a close and I am confident that we will make an announcement by the end of this month. I am sure you will understand that I will not be able to comment further given the advanced state of the search process.”
Wouldn’t the simplest way to simplify the structure be to de-list WPP AUNZ? I’ve never understood why that hasn’t yet happened. It would be a great move to help integrate the local operation globally and likely would take some reporting pressure off as well.
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He’s got a point you know
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