WPP Pursues Annual Savings of GBP275 Million by 2021
11 December 2018 - 7:01PM
Dow Jones News
By Adria Calatayud and Oliver Griffin
WPP PLC (WPP.LN) said Tuesday that it will simplify its
structure as the world's largest advertising holding company
pursues annual savings of 275 million pounds ($348.1 million) by
the end of 2021, adding that it will prioritize dividends over
buy-backs over the next three years.
The London-based company said it expects to incur GBP300 million
in restructuring costs over the next three years as it tries to
make a break from its unwieldy structure and be better positioned
to react quickly to client needs.
WPP has tried to offer a simpler structure, including combining
creative and digital assets, since Chief Executive Mark Read took
over the top role in September. As part of those efforts, WPP last
month said it would merge its iconic creative agency J. Walter
Thompson with digital unit Wunderman, weeks after uniting Young
& Rubicam with VML.
WPP, which also houses agencies such as Group M and Ogilvy, said
in October that it would look to sell a stake in its
market-research unit Kantar.
Shares in the company are down nearly 40% in the year to date,
as a series of guidance reductions and disappointing performances
amid wider disruption in the advertising industry have followed the
sudden departure in April of its founder and former CEO, Martin
Sorrell, following an internal probe. Mr. Sorrell now heads S4
Capital PLC (SFOR.LN).
WPP said it anticipates full-year results in line with
expectations, though like-for-like revenue for the year--less
pass-through costs--is set to fall 0.5%. In October, WPP guided for
like-for-like net sales to fall between 0.5% and 1.0% in 2018 and
operating margin to decline by 1.0% to 1.5%.
WPP said it will balance targeted mergers and acquisitions with
divestments. The company said it anticipates declaring a final
dividend of 37.3 pence, which will deliver a full-year dividend of
60 pence, in line with the full-year dividend in 2017. The company
intends to maintain its full-year dividend at this level, WPP
said.
Write to Adria Calatayud at adria.calatayudvaello@dowjones.com;
write to Oliver Griffin at oliver.griffin@dowjones.com
(END) Dow Jones Newswires
December 11, 2018 02:46 ET (07:46 GMT)
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