WPP profits fall again, but fall appears to be slowing
The world’s biggest communications holding company WPP has revealed that its revenues and profits have continued to fall, but the rate of decline has slowed down.
The company, which has been attempting to simplify its structure in the months since the departure of founder Sir Martin Sorrell, said that its like-for-like revenues were down by 1.4% in the last quarter, while headline profits were down by nearly 8% for the half.
It said the company had made a profit of £875m ($1.5bn) on revenues of £7.6bn ($13.5bn).
WPP’s agencies include Ogilvy, VMLY&R, Wunderman Thompson, Mediacom, Wavemaker and Mindshare.
Read: Early stages of three-year turnaround
WPP’s CEO Mark Read said in a statement: “WPP’s performance in the second quarter was slightly ahead of our internal expectations but in line with our full-year guidance and three-year strategic targets. Clients are responding well to our new offer, as evidenced by recent wins and expanded assignments including from eBay, Instagram and L’Oréal. An encouraging number of our businesses and markets are achieving good growth.
“That said, we are still in the early stages of our three-year turnaround plan, and we remain focused on returning the company to sustainable growth over that period. Our guidance for the full year is unchanged.
“We continue to simplify WPP, with a more integrated offer for our clients, better, more collaborative working environments for our people, and less complicated management structures.”
Read also signalled that the sale of a majority stake in research house Kantar will be used to reduce the company’s huge debt pile.
He said: “When the Kantar transaction completes, our disposal programme will have generated proceeds of c.£3.6bn, allowing us to return significant amounts to shareholders and reduce our leverage to the low end of the target range.
“The progress we have made and the positive new business momentum are reasons for optimism. As a creative transformation company with stronger, more tech-enabled agencies, we are well placed for the future as clients look for modern partners to help them navigate an increasingly complex and challenging marketing landscape.”
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