UK's WPP H1 revenue drops on client assignment losses
UK's WPP H1 revenue drops on client assignment losses
Overview
UK advertising group's H1 revenue declined 4.4% yr/yr
Diluted EPS falls 57.5% yr/yr
Operating profit margin improved, supported by cost savings and lower severance costs
Outlook
WPP expects H2 LFL revenue less pass-through costs to decline low to mid-single digits
Company maintains FY 2026 headline operating margin guidance of 12% to 13%
WPP anticipates FY 2026 adjusted operating cash flow before working capital of £800 mln to £900 mln
Result Drivers
CLIENT LOSSES AND LOWER SPEND - Co said H1 revenue declines were driven by prior-year client assignment losses and lower overall client spending in sectors such as CPG and technology
COST SAVINGS - Margin improvement was attributed to lower staff and severance costs as well as ongoing cost-saving measures
NEW BUSINESS WINS AND RETENTION - Co said new business wins and improved client retention contributed positively, but did not offset overall revenue declines
Company press release: ID:nRSF4823Pa
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
H1 Revenue |
| GBP 6.37 bln |
|
H1 Operating Margin |
| 4.10% |
|
H1 Operating Profit |
| GBP 261 mln |
|
Analyst Coverage
The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 9 "hold" and 5 "sell" or "strong sell"
The average consensus recommendation for the advertising & marketing peer group is "buy."
Wall Street's median 12-month price target for WPP PLC is GBp292.50, about 4.8% below its August 5 closing price of GBp307.10
The stock recently traded at 6 times the next 12-month earnings vs. a P/E of 5 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)