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(Alliance News) - WPP PLC on Thursday said it had a "exceptional recovery" from the pandemic in 2021, as it swung to profit from a GB2.79 billion loss the year before.
The London-based marketing communications and advertising agency said revenue for 2021 was up 6.7% to GBP12.80 billion from GBP12.00 billion, or up 13% on a like-for-life basis. Revenue less pass-through costs was GBP10.40 billion, up 6.5% from GBP9.76 billion in 2020, or up 12% like-for-like.
WPP said its "extraordinary" year was in part thanks to a "stronger-than-expected" macroeconomic environment, as global advertising spending grew by 23% during the year, following pent-up consumer savings over the pandemic.
WPP said there was strong structural growth in digital channels, with an "explosion" in e-commerce during the pandemic, and a boost to global digital advertising spend of 31% in 2021.
WPP swung to profit in the year, with reported pretax profit of GBP951 million, from a pretax loss of GBP2.79 billion. Headline profit before tax was GBP1.37 billion, up 31% from a GBP1.04 billion profit in 2020.
WPP declared a final dividend of 18.7 pence, up 34% from the prior year, bringing the total to 31.2p, which was a 30% increase from 24.0p in 2020.
The stock was down 7.2% to 1,092.00 pence each in London on Thursday morning. The wider FTSE 100 index was down 2.7%.
WPP has a confident outlook for 2022, predicting growth in like-for-like revenue less pass through costs of around 5%.
It expects headline operating profit margin to widen by 50 basis points. This was 14.4% in 2021, widened from 12.9% in 2020.
The company will continue its GBP800 million share buyback, of which GBP129 million is already completed. It noted it returned over GBP1 billion to shareholders in 2021 via buybacks and dividends.
Chief Executive Officer Mark Read commented: "It has been an outstanding year for WPP. Our top-line growth, driven by strong demand for our services in digital marketing, media, e-commerce and technology, has resulted in our fastest organic growth for over 20 years. As a result, we are two years ahead of our plan, hitting our 2023 revenue target in 2021."
By Elizabeth Winter; elizabethwinter@alliancenews.com
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