WPP’s annual outlook cut once again after ‘unacceptable’ performance

Global marketing communications giant WPP has slashed its annual outlook once again after new boss Cindy Rose admitted the firm’s recent performance was “unacceptable”.

The group said it now expects full-year like-for-like underlying revenues to fall by 5.5% to 6%, having previously guided for a decline of 3% to 5%, while it also cut its profitability guidance.

This follows a worse-than-expected underlying like-for-like revenues drop of 5.9% in the third quarter, or 11.1% lower on a reported basis.

The alert – which comes after it trimmed its sales outlook in July – saw shares in the firm slump more than 13% at one stage in early trading on Thursday.

Former Microsoft UK head Ms Rose, who took over from former chief executive Mark Read at the beginning of last month, said turnaround actions are being taken, with a strategic review under way.

She said: “I acknowledge that our recent performance is unacceptable and we are taking action to address this.

“There is a lot to do, and it will take time to see the impact, but in my first 60 days we are already moving at pace with some initiatives already announced and more to come.”

WPP revealed in July it had slashed its workforce by around 4,000 since the start of the year as it saw profits plunge to £98 million for the six months to June 30, down from £338 million a year earlier.

Job losses were largely focused on its WPP Media business, while it also moved to reduce its workforce through natural staff turnover to cut costs in the face of tougher trading.

Ms Rose said recovery plans will include “simplifying how we organise ourselves internally, as well as building a high-performance team culture”, with cost efficiency remaining in sharp focus and a renewed push into artificial intelligence (AI).

She has already been overhauling her senior team line-up, while deepening its ties with Google to boost AI technology offering.

More on its strategic re-think will be announced early in the new year, the firm said.

WPP – which owns agencies such as Ogilvy and VML – warned over annual profits in July as clients cut spending amid global economic uncertainty, with trading worsening throughout the year.

Mr Read left after seven years at the helm and a three-decade career at WPP.

His successor worked at Microsoft for nine years, most recently as its chief operating officer for global enterprise.

She was previously the president of the technology giant for Western Europe, and the chief executive of the UK business.

Her appointment was seen aligning with WPP’s efforts to sharpen its focus on AI and digital transformation, in a bid to keep up with rapidly evolving demands.

Third quarter figures on Thursday showed UK underlying like-for-like revenues fell 8.9%, with the “impact of client assignment losses amplified by spending cuts”, according to WPP.

It said UK trading pressure was felt the most on its WPP Media business, creative agency VML and AKQA design and innovation subsidiaries.