- Forecast Revision: WPP revised its full-year forecast for like-for-like (LFL) revenue less pass-through costs, now expecting -1% to 0%, down from the previous 0% to +1% range, which was estimated at +0.73%.
- First Half Results:
- Revenue: GBP7.23 billion, slightly higher than last year’s GBP7.22 billion, and above the estimate of GBP7.17 billion.
- Revenue less pass-through costs: GBP5.60 billion, a 3.6% decrease year-over-year, and below the estimate of GBP5.64 billion.
- LFL revenue less pass-through costs: -1%
- Headline operating profit: GBP646 million, a 3% decrease year-over-year, higher than the estimate of GBP618.7 million.
- Headline operating margin: 11.5%, in line with last year and above the estimate of 10.9%.
- Net income: GBP338 million, a 6.4% decrease year-over-year, yet above the estimate of GBP322.7 million.
- Headline earnings per share: 30.9p, down from 33.1p last year, but above the estimate of 29.0p.
- Interim dividend per share: 15.0p, unchanged from last year.
- Second Quarter Results:
- Revenue less pass-through costs: GBP2.91 billion, below the estimate of GBP2.95 billion.
- North America revenue: GBP1.15 billion, above the estimate of GBP1.09 billion.
- UK revenue: GBP396 million, below the estimate of GBP427.1 million.
- Western Europe revenue: GBP608 million, below the estimate of GBP630.8 million.
- Rest of world revenue: GBP756 million, below the estimate of GBP802.1 million.
- Global Integrated Agencies revenue: GBP2.39 billion, below the estimate of GBP2.46 billion.
- Public Relations revenue: GBP293 million, above the estimate of GBP286 million.
- Specialist Agencies revenue: GBP227 million, above the estimate of GBP217.1 million.
- LFL revenue less pass-through costs: -0.5%.
- Total Revenue: GBP3.82 billion, above the estimate of GBP3.74 billion.
- Market Comments: WPP cites pressure in China and its project-related businesses combined with the uncertain macro environment as reasons for moderating full-year expectations.
- Strategic Moves: WPP agreed to sell its majority stake in FGS Global to KKR at an enterprise valuation of $1.7 billion.
- Financial Impact: The deal is expected to generate total cash proceeds of around GBP604 million after tax, which will be used to reduce leverage.
A look at WPP PLC Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 4 | |
| Growth | 2 | |
| Resilience | 2 | |
| Momentum | 3 | |
| OVERALL SMART SCORE | 2.8 |
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 suggest that WPP PLC‘s long-term outlook remains a mixed bag according to the Smartkarma Smart Scores. While the company scores well in the dividend category at 4, indicating a solid payout to investors, its growth and resilience scores are somewhat lower at 2. This could signal potential challenges in these areas for the company in the future. Momentum and value both sit at a moderate 3, showing a stable but not outstanding performance in these aspects.
Overall, WPP PLC, a communications services group, covers a wide range of sectors including advertising, media management, public relations, healthcare, and branding services. With a diverse portfolio and a mix of ratings in different categories, investors might want to closely monitor how the company navigates its growth and resilience challenges while continuing to provide a healthy dividend to its stakeholders.
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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