NEWS29 April 2020

WPP Q1 revenue down

Financials News UK

UK – WPP’s revenue was down 7.9% in March as the company felt the effects of Covid-19, and it has introduced further cost-saving measures, according to a first quarter trading update.

Mark Read

In the first three months of the year, WPP’s revenue minus pass-through costs was £2.4bn, down 3.3% like-for-like.

In the UK, this was -4.2% compared to the same period in 2019, with a drop of 9.8% in the month of March. North America was WPP’s best performing region in the first quarter, with revenue down 1.9%.

As part of further cost-saving measures in addition to those announced at the end of March, WPP has made redundancies in some areas, but it is unclear which parts of the business are affected.

It has also brought in voluntary salary cuts and part-time working, while 3,000 staff above a certain salary threshold will have their pay cut by 10-20% for an initial three month period.

WPP said clients in sectors including automotive and travel and leisure had made the most significant cuts, but that spend fared better in consumer packaged goods, technology, healthcare and pharmaceuticals.

As of 31st March, WPP’s net debt was £2.8bn, down from £4.6bn the year before, largely due to a disposal programme including the company’s sale of a majority stake in Kantar. 

Mark Read, chief executive officer, WPP (pictured), said: “After a good start to the year, with growth outside of China in January and February, our business started to be materially impacted by Covid-19 in March. Our response has focused on four areas: the health of our people, serving our clients, helping to mitigate the impact of the virus on our communities and ensuring WPP is financially strong.”

Read said the company is observing clients shift their focus and spend towards “digital media and direct-to-consumer channels” and continued investment in marketing technology.