WPP share price: where next after impressive half-year results?
Last week, the British multinational advertising and PR company reported a strong half-year performance, though its CEO admits it remains in the early stages of its turnaround plan and is focused on delivering sustainable growth.
Over the last 12 months, WPP has seen its share price tumble more than 20%, with the advertising and PR giant struggling to navigate the exceptionally challenging environment on account of its sheer size.
However, this year the company embarked on a three-year turnaround plan that has proven successful, a fact reflected in its half-year results and its stock climbing more than 12% on a year-to-date basis.
Practise trading WPP and other UK stocks with an IG demo account.
WPP turnaround sees early results
The company’s performance in the second-quarter came in slightly above its own forecasts and remaining in line with its full-year guidance and three-year strategic targets.
WPP recorded a 1.6% rise in revenue to £7.62 billion, though its pre-tax profit came in 43.5% lower at £478 million compared with the same period a year ago. However, its full-year guidance remains unchanged and the half-year dividend was held at 22.7p a share.
‘Clients are responding well to our new offer, as evidenced by recent wins and expanded assignments including from eBay, Instagram and L’Oréal. An encouraging number of our businesses and markets are achieving good growth,’ WPP CEO Mark Read said.
‘That said, we are still in the early stages of our three-year turnaround plan, and we remain focused on returning the company to sustainable growth over that period. Our guidance for the full year is unchanged.’
WPP sells down stake in Kantar
In July, WPP agreed to sell 60% of media group Kantar, a move that has generated around £3.6 billion in capital. Around £1.9 billion of that figure will reduce the company’s leverage to the low end of its target range, while £1.2 billion will be returned to shareholder, the company said.
Over the last 15 months, WPP has made 44 disposals, further simplifying the group and positioning the business for future growth.
‘The progress we have made and the positive new business momentum are reasons for optimism,’ Read said. ‘As a creative transformation company with stronger, more tech-enabled agencies, we are well placed for the future as clients look for modern partners to help them navigate an increasingly complex and challenging marketing landscape.’
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
See an opportunity to trade?
Go long or short on more than 16,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets