Advertising giant WPP today pledged to pay an interim dividend despite recording a slump in revenues as clients shunned placing ads on billboards and in cinemas.
The company will pay an interim dividend of 10p a share as it said is remains profitable on a full year, headline bases and the income is important to its investors. Its 2019 final dividend, put under review when the Covid outbreak emerged, has been cancelled conserving £450 million of cash.
The ads specialist posted a 11.5% fall in like-for-like sales, with revenues in the UK plunging 23.3% in the second quarter as lockdown hit trading. India was down 25.1%, the US 9.6% and China – emerging from the Covid crisis – fell 3.1%.
The company said its clients were looking to up their spend on ecommerce and streaming with demand spiking in lockdown, while “media spend on outdoor, cinema and print has suffered materially”.
Chief executive Mark Read is attempting to turnaround the company by slimming down the sprawling group, built up by advertising tycoon Sir Martin Sorrell.
WPP said it is on track to hit the upper end of its £700 million to £800 million cost savings target and has slashed its debt following the $4 billion sale of its Kantar division to Bain Capital last year.
Read said: "Assuming there is no second wave nor major lockdown, the second quarter is expected to be the toughest period of the year, although we remain cautious on the speed of recovery."
