WPP’s share price has fallen by 7.3% to 785.80p having lowered its full-year predictions after profits halved in the first half of 2023. The news follows reduced spending across the board from US firms.
The British multinational’s downgraded yearly forecast. It now predicts full-year like-for-like growth of 1.5-3.0%, down on its previously forecasted growth of 3-5%. This is despite the fact that WPP’s current headline operating profit margin of around 15.0% is higher than the 11.5% that has been reported in its half-year results.
“Our performance in the first half has been resilient with Q2 growth accelerating in all regions except the USA, which was impacted in the second quarter by lower spending from technology clients and some delays in technology-related projects.
“This was felt primarily in our integrated creative agencies. China returned to growth in the second quarter albeit more slowly than expected. In the near term, we expect the pattern of activity in the first half to continue into the second half of the year,” WPP CEO, Mark Read said.
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“Our media business, GroupM, grew consistently across the first six months as did our businesses in the UK, Europe, Latin America and Asia-Pacific. Client spending in consumer packaged goods, financial services and healthcare remained good and, despite short-term challenges, our technology clients represent an important driver of long-term growth.
He continued: “Our agencies performed extremely well at the Cannes Lions Festival winning five Grand Prix and 165 Lions with Mindshare recognised as the most-awarded media agency. We won major new business assignments with clients including: Reckitt, Mondelēz, easyJet, Lloyds Banking Group, Pernod Ricard and India’s second largest advertiser, Maruti Suzuki.”
Revenue in the six months to June 2023 did however increase by 6.9% to £7.22 billion from £6.76 billion last year, although pre-tax profit plummeted 51% to £204 million from £419 million.
On a more positive note, the firm saw its UK revenue grow by 9%; this figure was not matched in North America however, with WPP registering a 4.1% drop.
