Ad gaint WPP posts £2.8b pre-tax loss, increases payout

WPP, the world’s largest advertising group, reported a £2.8 billio pre-tax loss last year as the pandemic hit its business and triggered a multi-billion write down in the value of some of its ad agencies.

The group, which said it expects to see a “solid recovery” this year, ran up £3.1bn in impairment charges which pushed it to a loss last year, The Guardian reports.

WPP reported revenues less pass through costs – a key metric closely watched by analysts - of 8.2 percent last year slightly ahead of consensus.

The advertising group has seen significant improvement since reporting a 15.1 percent decline in the second quarter, with revenues shrinking by 6.5 percent in the final three months of 2020.

“WPP’s performance has been remarkably resilient,” said Mark Read, WPP chief executive, adding:

“While revenue was significantly impacted as clients reduced spending, our performance exceeded our own expectations and those of the market throughout the year. While uncertainties remain around the impact of the vaccine roll-out and economic growth, we continue to expect 2021 to be a year of solid recovery.”

WPP raised its full-year dividend by 5.7 percent to 24p a share, and said it would resume a £620 million share buyback plan, as the company’s net debt hit its lowest level in 16 years.

WPP reiterated its guidance for 2021 saying it expected to return to positive organic growth by the second quarter.