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WPP Disappoints in Q4
WPP has reported results for the fourth quarter and full year 2019. Improvements from Q3 were not maintained to the end of the year and shares tumbled around 14% on the news. Nevertheless CEO Mark Read said 'substantial progress' was made in the year the group sold a majority stake in Kantar.
 For the full year, like-for-like revenue less pass through costs fell 1.6% to £10.8bn; and profit before tax fell 21.9% to £982m. The company blamed the latter on tough comparatives - a one-off gain in the first half of 2018 - and on a £238m charge on the revaluation of financial instruments. Largely thanks to the Kantar sale, net debt fell from £4bn to £1.5bn.
Read (pictured), whose first full year in charge this was, and who has warned that a turnaround will take time, declared himself 'optimistic about the future of our industry and WPP's position within it', 'though admitting 'there is still much more work to do'. Referring to a three-year plan to get the group back on track, he stated: '2019 was the foundational year for the new WPP strategy, and thanks to the hard work of all our colleagues we have made substantial progress in a short period of time. We said that we would make progress in the journey to return WPP to growth, simplifying our business and reducing our debt, and we have delivered against each of these goals - having met our guidance for 2019, achieved our restructuring targets and completed the sale of a majority stake in Kantar. The second half of 2019 was stronger than the first, with performance improving globally and in the United States, our largest market'.
Looking to the next year, Read told UK paper City A.M. the key structural changes in the business were complete, but said there could be some 'tidying up around the edges'. WPP will continue looking at possible acquisitions, especially in marketing technology; but has forecast a flat year for revenue and operating margin, excluding the potential impact of the coronavirus outbreak.
The firm continued to struggle in North America, as it has since 2016, but also reversed the c.3% growth from Q3 in the UK. Africa and the Middle East saw some growth but Asia-Pacific, Latin America and Central and Eastern Europe slipped a little.
Other 'big 6' agencies are also enduring rough times, with Publicis, Dentsu Aegis and Havas all reporting organic declines in revenue last year. Interpublic and Omnicom fared better with small increases.
Web site: www.wpp.com .
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