- WPP’s second quarter like-for-like (LFL) revenue less pass-through costs slightly exceeded estimates, reporting a decline of 5.8% against an estimate of 5.81%.
- Total revenue came in at GBP 3.42 billion, just below the expectation of GBP 3.45 billion.
- For the second quarter, revenue less pass-through costs was GBP 2.54 billion, below the estimate of GBP 2.99 billion.
- In North America, revenue less pass-through costs was GBP 974 million, slightly under the estimate of GBP 988.4 million.
- UK operations overperformed, with revenue less pass-through costs of GBP 381 million, surpassing the estimate of GBP 363.7 million.
- Western Europe reported revenue less pass-through costs at GBP 534 million, below the GBP 543.7 million expectation.
- The rest of the world achieved revenue less pass-through costs of GBP 655 million, against an expected GBP 676.5 million.
- Global Integrated Agencies generated GBP 2.18 billion in revenue less pass-through costs, slightly less than the GBP 2.2 billion forecasted.
- The Public Relations division underperformed, with revenue less pass-through costs at GBP 168 million, versus the estimate of GBP 200.5 million.
- Specialist Agencies reported GBP 193 million, below the expected GBP 203 million.
- For the first half, WPP reported revenue of GBP 6.66 billion, matching expectations.
- Revenue less pass-through costs was slightly above forecast at GBP 5.03 billion compared to an estimate of GBP 5.02 billion.
- First half LFL revenue less pass-through costs declined by 4.3%, slightly better than the anticipated 4.35% decrease.
- Headline pre-tax profit was GBP 300 million, a 43% year-on-year drop but exceeded the estimate of GBP 279.6 million.
- Headline operating profit met expectations at GBP 412 million.
- Headline operating margin slightly surpassed the estimate at 8.2%, compared to an expected 8.19%.
- Net income was GBP 219 million, down 35% year-on-year, yet exceeded the estimate of GBP 164.2 million.
- Headline earnings per share were 20p, beating the estimated 15p.
- Net debt reported at GBP 3.3 billion.
- Interim dividend per share was halved at 7.5p, compared to 15.0p the previous year.
- Capital expenditure for the year is projected at about GBP 220 million, lower than the previous target of GBP 250 million.
- The forecast for LFL revenue less pass-through costs remains between a 3% to 5% decline, in contrast to the estimate of 2.91%.
- WPP anticipates a reduction in full-year headline operating profit margin by 50 to 175 basis points year-on-year, excluding FX impact.
- The company expects cost actions taken in the first half to improve margins in the second half of the year.
- Forecasted full-year adjusted operating cash flow before working capital is updated to be between £1.1 billion and £1.2 billion, down from the previous estimate of around £1.4 billion.
- Full-year cash restructuring costs are expected to be about £90 million, a decrease from the earlier forecast of £110 million.
- WPP reiterates its medium-term targets set in January.
“`
A look at WPP PLC Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 5 | |
| Growth | 3 | |
| Resilience | 2 | |
| Momentum | 2 | |
| OVERALL SMART SCORE | 3.0 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Analysts using Smartkarma Smart Scores have assessed WPP PLC‘s long-term outlook across various key factors. The company has received a top score of 5 for Dividend, indicating a strong performance in this area. This suggests that WPP PLC is likely to provide attractive dividends to its investors over the long term, reflecting its stability and potential for consistent returns.
On the other hand, WPP PLC scored lower in Resilience and Momentum, with scores of 2 for each. This indicates that the company may face some challenges in terms of its resilience to market fluctuations and its momentum for growth. While WPP PLC received average scores for Value and Growth, there may be room for improvement in these areas to enhance the company’s overall long-term performance.
Summary of the Company: WPP plc is a communications services group that offers a wide range of services including advertising, media investment management, public relations, healthcare communications, and branding services.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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