ii view: WPP makes a promising start

by Keith Bowman from interactive investor |

Media company WPP has made an encouraging start to its three-year recovery plan. 

First-half results

  • Revenue up 1.6% to £7.6 billion
  • Headline operating profit down 8% to £730 million
  • Net debt down 13.9% to £4.38 billion
  • Dividend payment unchanged at 22.7p per share
  • Full-year guidance unchanged

Chief executive Mark Read said:

"WPP's performance in the second quarter was slightly ahead of our internal expectations but in line with our full-year guidance and three-year strategic targets. Clients are responding well to our new offer, as evidenced by recent wins and expanded assignments including from eBay, Instagram and L'Oréal. An encouraging number of our businesses and markets are achieving good growth.

That said, we are still in the early stages of our three-year turnaround plan, and we remain focused on returning the company to sustainable growth over that period. Our guidance for the full year is unchanged.”

ii round-up:

Advertising and data research company WPP (LSE:WPP) employs more than 130,000 people with operations in over 100 countries. 

Quoted on both the London and New Stock Exchanges, its clients include over 350 companies in the Fortune Global 500 index. 

The loss of its founder and chief executive in (April) 2018 marked a highly difficult year in the company’s history. Significant client losses, particularly in the US and including customers in the automotive and pharmaceutical sectors, further deepened its struggles. 

For a round-up of these half-year results, please click here.

ii view:

A change in leadership and direction will likely take time to permeate the organisation. A first major step to simplify and reposition the company has been made with the part sale of Kantar. Management focus can now move elsewhere, with debt reduction staying in its sights.

A forward price earnings ratio of under ten and below its ten-year average potentially attempts to remind investors of its battle with Alphabet Google and Facebook. A dividend yield of over 6% offers investors some compensation for their patience. However, any turnaround at WPP, we believe, is unlikely to be rapid.  


  • A three-year strategy to return it to growth
  • The new chief executive will want to make his mark
  • A reduction in group debt is underway


The average rating of stock market analysts:


These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

get more news and expert articles direct to your inbox
Sign up for a free research account and get the latest news and discussion, and create your own Virtual Portfolio