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NEWS1 March 2019

Challenging year for WPP with revenue fall

Financials News UK

UK – WPP reported billings up 0.4% to £55.8bn for 2018 although revenue fell 1.3% to £15.6bn and operating profits were down almost 9%.

WPP’s CEO, Mark Read (pictured), warned that "2019 will be challenging particularly in the first half – due to headwinds from client losses in 2018".

In what Read described as the start of WPP’s three year turnaround plan he said the business was making good progress in implementing the strategy which included setting up its two new integrated networks VMLY&R and Wunderman Thompson, as well as beginning "the process of seeking a financial and strategic partner for Kantar". 

In terms of its operating profit, headline EBITDA was down 8.8% to £2.3bn, from £2.5bn the previous year, although WPP said its revenue is weighted to the second half of the year across all regions and sectors.

Its data investment management business – which includes the Kantar brands and Lightspeed – saw the biggest fall in revenue, down 4.5% to £2.6bn ( 1.8% fall at constant currency).

In its financial statement it said "Kantar Worldpanel and Kantar Media showed strong like-for-like revenue less pass-through costs growth, with Kantar Insights, Kantar Health, Kantar Public and Lightspeed less robust."

Reported profit before tax for WPP fell by 30.6% to £1.5bn from £2.1bn, reflecting the £302m of restructuring and transformation costs and £184m of goodwill impairment charges.

It intends to pay a final dividend of 37.3p per share – which with the interim dividend of 22.7p per share, makes a total of 60.0p per share for 2018.

@RESEARCH LIVE

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