WPP revenues down in Q2

In its interim financial results for 2020, revenue less pass-through costs were down 15.1%, and fell 23.3% in the UK. In comparison, WPP’s first quarter revenue was down 7.9% in March as the company felt the effects of Covid-19.

WPP’s half-year revenue minus pass-through costs was 10.2% down, but the company said that it had improved liquidity and was on track for £700m to £800m of cost savings, of which £296m have already been realised.

Around 25% of the savings are expected to be permanent when the company recovers from the Covid-19 lockdown. The proposed savings announced earlier this year included freezing new hires; reviewing freelance expenditure; stopping discretionary costs; and postponing planned salary increases.

The company has restarted paying a dividend of 10p, citing the better than expected results.

Net debt at WPP is £2.7bn, down £1.5bn year-on-year. The company said this reflected its sale of 60% of global research, consulting and analytics business Kantar to Bain Capital Private Equity, as well as strong working capital management.

Mark Read (pictured), chief executive officer at WPP, said that assuming there is neither a second wave of Covid-19 nor any further major national lockdowns, the company had likely passed through the toughest period of the year, but was cautious at how quick the recovery would be.

“Our strategic transformation remains on track but as Covid-19 accelerates the change in our sector, we are accelerating our plans,” Read added.

“With £4.7bn of liquidity thanks to the Kantar transaction, and as we deliver against our cost savings targets, our financial position remains strong. As a result, we are able to return to paying our dividend, with an interim dividend of 10p for 2020.”