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WPP PLC on Thursday posted a first half profit plunge on weak client spending and a ‘slower new business environment’. The London-based advertising agency’s pretax profit declined by 71% in the six months that ended June 30, sinking to £98 million from £338 million. WPP shares traded down 3.1% at 389.63 pence on Thursday morning in London, and have slipped 45% in the 12 months. Headline operating profit was 36% lower on-year at £412 million from £646 million, though in line with the July forecast of an outcome between £400 million to £425 million. The headline operating profit margin was 8.2%, falling 330 basis points from 11.5% on-year, or 290 basis points on a like-for-like basis. Revenue was down to £6.66 billion from £7.23 billion a year ago, falling by 7.8% overall and by 2.4% like-for-like. Revenue less pass-through costs decreased by 4.3% LfL, matching the July forecast for a rate of decline between 4.2% and 4.5%. WPP maintained its full-year target for a revenue less pass-through costs decline between 3% and 5%. Headline operating profit margin is still expected to decline in the range of 50 to 175 basis points, excluding currency impact. The firm in July reported ‘challenging’ conditions and the impact of severance costs at WPP Media. On Thursday, WPP disclosed its headcount was 104,000 at June 30 compared to 111,000 a year ago, a reduction of 7,000 employees. In July, it said it was ‘continuing to reduce structural costs, while taking appropriate actions to respond to the current trading environment’. Severance costs totalled £86 million in the first half, up from £36 million on-year. WPP cut its interim dividend per share to 7.5p, half the previous year’s 15p payout. ‘The board recognises the importance of dividends to shareholders and today’s step balances that, creating room for our incoming CEO to review the group’s strategy and capital allocation policy while maintaining financial flexibility,’ WPP said. Cindy Rose, a Microsoft Corp executive, was hired to replace current CEO Mark Read in July. She assumes the role on September 1, though Read will oversee the transition until the end of the year. Read’s departure was announced the day after a July profit warning. ‘It has been a challenging first half given pressures on client spending and a slower new business environment,’ Read commented. ‘We have, however, made significant progress on the repositioning of WPP Media, simplifying its organisational model to increase effectiveness and reduce costs. Meanwhile, the acquisition of InfoSum, the launch of Open Intelligence and the continued adoption of WPP Open all strengthen our data and technology capabilities.’ Copyright 2025 Alliance News Ltd. All Rights Reserved.
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