WPP’s share price has fallen by 17% this morning after the group revealed worse than expected falls in revenue.
The preliminary results confirmed a 0.7% drop in reported revenues, with China down 21.2%, UK -5.1%, North America -1.4%, Rest of World -4.8%. Only Western Continental Europe saw growth of +1.4%.
WPP, which has a major “creative powerhouse in Manchester” has seen its share price fall from 770.20 last night to 633.00 at the time of writing.
“The top line was lower, however, with Q4 impacted by weaker client discretionary spend. We did see growth from our top 25 clients of 2.0% and an improving new business performance in the second half of the year with wins from Amazon, J&J, Kimberly-Clark and Unilever reflecting the strength of our integrated offer,” said Mark Read, Chief Executive Officer of WPP.
“The actions we are taking across WPP will strengthen our existing client relationships and drive our new business results. We expect some improvement in the performance of our integrated creative agencies in the year ahead. At the same time, we have comprehensive efforts underway to improve our competitive positioning through new leadership at GroupM, with further investment in AI, data and proprietary media.
“Though we remain cautious given the overall macro environment, we are confident in our medium-term targets and believe our focus on innovation, a simpler client-facing offer and operational excellence will support our growth and deliver greater value for our shareholders.”
Its reported income for 2024 was £14.7bn, down 0.7%, but up 2.3% when looking at it on a like-for-like basis. Operating profits were also down at 2.5% to £1.7bn.
The group said that it was looking ahead to an AI, data and technology-led future and it is now one year into its “Innovating to Lead” plan.
This, it said, was because it believes that “AI will be the single most transformational development in our industry since the internet. It will impact every element of how we work, freeing up our creative people to do better work, increasing the efficiency of our production teams to produce much greater volumes of high-quality work and empowering our media teams to develop and deploy more effective plans in a fraction of the time.”
In 2024 it invested £250m in its AI-powered marketing operating system, WPP Open and plans to increase this investment to £300m this year.
WPP owns agencies including GroupM, Ogilvy and VML and looking ahead said it expected organic revenue to come in between flat and down 2% this year, with performance improving in the second half of the financial year.
