WPP cuts full-year forecasts after tough quarter

26th Oct 2023 07:38

(Sharecast News) - WPP cut its full-year guidance on Thursday, as technology clients continued to curtail spending.

The advertising firm - the world's largest - reported a 5% fall in third-quarter net revenues to £2.84m. On an underlying basis, revenues fell 0.6%.

The blue chip also more than halved its forecast for annual net revenue to between 0.5% and 1%, from previous guidance for between 1.5% and 3%.

Mark Read, chief executive, said: "Our top line performance in the third-quarter was below expectations.

"[It] continued impacted by the cautious spending trends we saw in the second quarter, particularly across technology clients, with more impact from this felt in GroupM over the summer than the first half."

Read said the firm would now look to strengthen its offer by launching specialist agency VML and further integrating GroupM with common products and single technology platform, as well as streamlining operations and back-office functions.

He said: "In a world being rapidly reshaped, we need to continue to evolve our offer to clients and simplify our business.

"I am excited about the creation of VML and the continued evolution of GroupM. Both developments will strengthen our offer to client, simplify the integration of our services and maximise the returns of our ongoing investment in AI and technology."

GroupM is WPP's media planning and buying arm, and accounts for around a third of the group's annual revenue. It currently employs around 42,000 people worldwide.

WPP first announced earlier this month that it would combine two of its creative agencies - Wunderman Thompson and VMLY&R - to create VML. The combined agency will have more than 30,000 staff in 64 markets.