Profits have halved at advertising and marketing giant WPP after clients slashed their spending and new business dried up in a “challenging” first half of the year.
The London headquartered company, which owns names such as Ogilvy and Burson, also cut its interim dividend from 15p to 7.5p ahead of the arrival of new CEO Cindy Rose from Microsoft in September.
The shares fell 18.35p, or around 4.5%, to 383.75p
Outgoing boss Mark Read revealed that WPP’s first half revenues fell nearly 8% to £6.66 billion in the six months to end June, although the drop was only 2.4% on a like for like basis.
WPP suffered some major clients losses during the first half of the year, including much of its Mars business and its Coca-Cola media business in North America. Both accounts were won by rival Publicis.
For the year as a whole like for like revenues are expected to be 3% to 5% lower than 2024 with the headline operating profit margin down 50 to 175 bps year on year .
First half operating profits dropped by 48% to £221 million while pre-tax profits were 71% down from £246 million to £70 million.
Read said: "It has been a challenging first half given pressures on client spending and a slower new business environment. 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.”
He said the halving of the interim dividend comes ahead of a “review of the strategy and future capital allocation policy” under the new leadership.
One of the biggest declines in revenue was seen in China where they fell 16.6%. The UK was down 6%, western Europe 5.5% but north America only 2.4%.
Globally revenue from WPP's top 25 clients held broadly flat with 0.1% like for like growth in the first half, although all the main sectors came under “more pressure in the second quarter.”
Cost savings included a headcount reduction of 3.7%, generating annual savings of more than £150 million from 2026.
Victoria Scholar, head of investment, at the interactive investor platform said: “WPP faces an uphill battle amid the macroeconomic uncertainty and after the loss of some major clients. Winning new business has been challenging and its share price has struggled as a result - Publicis overtook WPP to become the world’s largest ad agency last year.
“Cindy Rose boasts an impressive CV having spent nine years at Microsoft rising to Chief Operating Officer. Her tech background will be valuable to WPP which is trying to navigate a rapidly changing ad landscape with the swift ascent of very high-quality AI content that risks cannibalising WPP’s core offering. “
