NEWS18 April 2018

WPP downgraded by ratings agency

Financials Media News UK

UK – Credit ratings agency Moody’s has revised its outlook on advertising firm WPP from ‘stable’ to ‘negative’.

Sir Martin Sorrell

The move follows the departure of the company’s chief executive Sir Martin Sorrell (pictured), who had been at the helm for 33 years.

Moody’s said Sorrell’s resignation, combined with “recent operational weakness relative to peers” had resulted in “credit metrics which continue to be weak for the rating category”.  

Christian Azzi, a Moody’s assistant vice-president and lead analyst for WPP, said in a statement: "Sir Martin Sorrell’s resignation comes at a time when the company is already facing a number of operational challenges and introduces uncertainty over the strategy and ultimately the structure of the group going forward.”

WPP posted weak results in March, with Sorrell describing 2017 as "not a pretty year" for the group, with a 0.3% drop in annual revenue.

Following the announcement of Sorrell’s sudden resignation over the weekend, WPP’s share price fell by over six per cent on Monday ( 16 April).