WPP profits nosedive
WPP's profit before tax plunged more than 30.6% in 2018 to £1.46bn in the wake of client losses and a major restructuring plan.
Reporting its year end preliminary results on Friday (1 March 2019), chief executive Mark Read repeated his earlier remarks that the first half of 2019 would be particularly challenging "due to headwinds from client losses" in 2018.
WPP reported that revenue fell 1.3% to £15.6 billion last year, while like-for-like sales dipped 0.4%.
"However, we start the year with fewer clients under review than we did in 2018, and investments in creativity and technology will further improve the competitiveness of our offer," Read said.
Last year WPP lost Ford after 75 years working together, as well as American Express and PepsiCo.
WPP also merged JWT with digital network Wunderman, and VML with Y&R. The mergers were the start of a major shake-up and were followed by the announcement that thousands of job were under threat globally as WPP looks to streamline parts of its sprawling empire over the next three years.
“Since September, we have made good progress in implementing the new strategy for WPP," said Read on Friday.
"We have set out our vision for a more client-centric WPP, simplified our offer through the creation of two new integrated networks, VMLY&R and Wunderman Thompson, realigned our US healthcare agencies with major networks, formed the Company’s first executive committee and begun the process of seeking a financial and strategic partner for Kantar.
"Through 36 disposals since April 2018, we have strengthened our balance sheet and streamlined our business, raising £849 million of cash proceeds in 2018."
Read added that WPP is showing "early signs of success" in attracting new business.
The newly formed VMLY&R, for example, has seen client wins totalling $25 million in its first 90 days.
"The quality of our creative work has been exceptional, with six WPP spots featuring at this year’s Super Bowl and work such as Grey’s ‘The Best Men Can Be’ for Gillette demonstrating once again the global impact of what we do," he said.