As WPP's performance staggers new CEO Mark Read maps plan for the future

WPP revenue impact by currency headwinds and has dropped by 2.1 % (Euro 7.493 bn) compared to last year according to their 2018 Interim Results. New CEO Mark Read said that he is focused on winning and retaining business and cleaning up structural inefficiencies. The report points out that compared to Q1 2017 like to like revenue is up by 1.6% and Q2 is up by 2.4% excluding the impact of acquisitions and currency. The company’s estimated new business billings of 3.2 billion were won in the first half of the year, returning to a strong performance.

Read said, “We have focused our efforts on providing more effectively integrated solutions to clients and, in competitive pitches; we have won or grown business with clients including Adidas, Hilton, Mars, Mondelez, Shell, and T-Mobile.”

Additionally, “We have looked at our offering and begun to focus our portfolio through 15 disposals and divestments, including Globant and AppNexus, generating cash proceeds of £676 million so far this year, which will also strengthen our balance sheet and improve our average net debt to EBITDA ratio.”

Key statistics:

• Reported revenue down 2.1% at £7.493 billion, impacted by currency headwinds of 5.0%.
• Constant currency revenue up 2.9%, like-for-like revenue up 1.6% (Q2 up 2.4%)
• Constant currency revenue less pass-through costs up 1.4%, like-for-like revenue less passthrough costs up 0.3% (Q2 up 0.7%)
• Headline profit before interest and tax £821 million down 7.0%, down 2.3% in constant currency
• Headline PBIT margin 13.3% down 0.5 margin points reportable and constant currency, down 0.4 margin points like-for-like n Headline profit before tax £735 million down 7.4%, down 2.5% in constant currency
• Profit before tax £846 million up 8.6%, up 14.2% in constant currency primarily reflecting net exceptional gains
• Profit after tax £705 million up 11.3%, up 16.8% in constant currency
• Headline diluted earnings per share 42.6p down 6.2%, down 1.3% in constant currency
• Diluted earnings per share 53.4p up 14.6%, up 20.3% in constant currency
• Dividends per share 22.7p flat with 2017
• Share buy-backs of £201 million, equivalent to 1.3% of the issued share capital

Speaking of his role as CEO, Read said, “As Chief Executive, my focus will be on invigorating our company and returning the business to stronger, sustainable growth. Our review of strategy is underway, addressing our structure, our underperforming operations, particularly in the United States, and how we position the company for the future. We will provide an update by the year-end.”