WPP shares snipped lower with no growth expected this year

WPP (LSE:WPP), the London-headquartered advertising and communications firm, closed Wednesday down around 2% priced at 702.25p after reporting lacklustre first-half financial results.

Also, the firm announced the sale of a stake in public relations business FGS Global to private equity buyer KKR in a deal worth $775 million – the transaction valued the PR company at $1.7 billion.

WPP said it would use proceeds to reduce its debt and focus on its ‘core creative transformation’.

In terms of financials, meanwhile, WPP reported flat revenues of £7.2 billion for the first six months of 2024, whilst pre-tax profits were down 3.8% to £525 million.

It meanwhile adjusted down full-year guidance to reflect ‘the macroeconomic pressures and challenges in China’. WPP now expects full-year revenue to be flat at best, predicting the “growth” rate between -1% and 0%.

The ongoing business transformation will also see some 3,000 jobs axed by WPP – alongside investments in artificial intelligence and efficiencies.

“Although today’s headline results are broadly as suggested by consensus estimates, they highlight WPP’s continued short-term underperformance versus other players – not something that investors have been used to seeing historically,” said Roddy Davidson, analyst at stockbroker Shore Capital.