WPP promises strategy revamp in first update since Martin Sorrell resignation
Advertising giant WPP today said reported revenue for the first quarter had dipped by four per cent as it gave its first trading update since losing chief executive Martin Sorrell earlier this month.
Accounting for currency headwinds of six per cent, revenue was up two per cent while like-for-like revenue rose 0.8 per cent on the same period last year.
Firm bosses also promised investors it would be taking “a fresh look” at strategy following the departure of its boss.
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The drop in sales was lower than expected from analysts, prompting shares to rise seven per cent this morning.
Total group revenue sat at £3.6bn, compared to £3.7bn for the same period in 2017. New business of $1.7bn (£1.3bn) in billings was won by WPP in the first quarter.
The results follow a turbulent month for the company, which saw Sorrell leave after 33 years in charge of the business in the wake of allegations into financial misconduct.
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Executive chairman of the group Roberto Quarta said he was pleased with the results, which were in line with expectations.
“Mark Read and Andrew Scott are providing the stability and leadership WPP requires, but there is no standing still,” he said.
“They have my and the board’s full backing to review the strategy, to come back to us with recommendations, and to move forward decisively to implement our vision for the group.”
Mark Read, one of the names touted to take over from Sorrell, and Andrew Scott, chief operating officers, added:
As we said to our people across the group, our companies and client teams are exceptionally good at what they do. They have their own strong leaders, who hold the primary client relationships. Clients have made it very clear that they value their partners within WPP.
We intend to build on these strengths by taking a fresh look at our strategy, developing a vision for the group that recognises the challenges and opportunities presented by the structural shifts in our industry, and executing resolutely against it.
Mike Van Dulken, head of research at Accendo Markets said the positive reaction to the results was due to the first quarter being better than expected, WPP’s focus on reviewing strategy and potential for M&A in the future.
“At 1250p (breakout to early-March levels) hopes seem high that the shares can regain not just mid-late Feb highs (17 per cent upside to 1,470p), but continue their retracement (already bounced 15 per cent from April’s 2018 lows of 1,080p) towards early 2017’s 1,928p all-time peak (54 per cent upside),” he explained.
“Having fallen from grace (share price and CEO), investors will be hoping that management can engineer a more elegant recovery.”
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