Flat Year in 'Challenging' Times for WPP

WPP has reported preliminary results for the full year 2023, with revenue (less pass-through costs) of £11.86bn, up 0.9% on a like-for-like basis, and operating profit down more than 60% to £531m.

In the fourth quarter, the same revenue figure grew 0.3%, with strong growth in the UK and India partially offset by declines in Germany, China and the USA. The firm says a decline of 4.5% in the US was primarily due to lower spend by technology, healthcare and retail clients, partially offset by growth in CPG, telecoms and automotive sectors. For the coming year, the group is cautious, forecasting growth of 0-1% again, but with improvement in headline operating profit margin of 20-40bps, excluding currency impact.

CEO Mark Read (pictured) said the year had been 'more challenging than we expected due to cuts in spending by technology clients', but said the overall performance was 'resilient', with operating margin improvement driven by 'disciplined cost control, while continuing to invest in AI, data and technology'. Net new business of $4.5bn in the year was encouraging, and Read says his team are ' optimistic about the strategic opportunities ahead' and 'confident that we can deliver accelerated and increasingly profitable growth over the medium term'.

The group has committed to a significant investment in AI in the coming year and Read said, 'AI will be fundamental for our business and we are embracing the opportunities that it presents, putting it at the heart of our operations and our work for clients. Our AI-powered platform, WPP Open, is now being used by more than 30,000 people across WPP with growing adoption by our clients'.

Group home page: www.wpp.com .