By Paul Sandle
LONDON (Reuters) – Ad group WPP reported a worse-than-expected decline in organic revenue after a disappointing final quarter when it was hit by weaker client discretionary spending and said it had to be cautious about 2025, sending its shares sharply lower.
Chief Executive Mark Read said it was a “tough market out there”, with pressures in its home British market, the U.S. and China, as the group forecast flat revenues at best this year.
Shares in WPP, which lost its crown as the biggest ad group to French rival Publicis last year, plunged 16% to a four-year low on the revenue miss and weak outlook.
Both groups are set to be overtaken in 2025 when their U.S. rivals, Omnicom and Interpublic Group, complete an agreed $13.25 billion all-share merger.
Read said WPP had met expectations for operating profit, which rose 2.0% to 1.71 billion pounds ($2.17 billion) on a like-for-like basis. Organic revenue fell 1.0%, missing analysts forecasts of a 0.4% drop.
But he said he had to be cautious about 2025, seeing little respite in China, where WPP has a big presence in the luxury and automotive sectors, and a “choppy” U.S. market.
“Given the newsflow, particularly from the U.S., there are many reasons that we are cautious about the year,” he said.
“The new administration wants to get America growing strongly, but there’s no doubt that tariffs and subsequent inflation is making people nervous,” he added.
WPP, the owner of agencies GroupM, Ogilvy and VML, said it expected organic revenue to come in between flat and down 2% this year, with performance improving in the second half.
Read restructured WPP in 2024 by creating the VML and Burson agencies and simplifying its media buying agency GroupM.
He said the changes were necessary to get ready for AI, but they had an impact as its people were focused internally.
“After a year of painful restructuring, we are in a good position to focus on our clients,” he said.
($1 = 0.7898 pounds)
(Editing by Sarah Young and Tomasz Janowski)
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