Former WPP CEO Sorrell sensationally quit in 2018 amid allegations of personal misconduct
London (AFP) - British advertising giant WPP on Friday said net profit slumped more than 50 percent in the first half, as the company streamlines after the controversial exit of founder Martin Sorrell.
Profit after tax slid 53.5 percent to £312 million ($379 million, 338 million euros) in the six months to the end of June, compared with £672 in the first half of 2018 when WPP benefitted from vast one-off gains.
Revenue dropped less than expected, helping to propel its share price sharply higher in early London deals.
“We continue to simplify WPP, with a more integrated offer for our clients… and less complicated management structures,” chief executive Mark Read said in the earnings statement.
“As a creative transformation company with stronger, more tech-enabled agencies, we are well placed for the future as clients look for modern partners to help them navigate an increasingly complex and challenging marketing landscape,” added Read.
WPP is streamlining operations in a bid to better compete with the likes of Google and Facebook who have captured advertising spend by multinationals looking to cut costs.
The group is meanwhile undergoing vast changes since former CEO Sorrell sensationally quit in 2018 amid allegations of personal misconduct.
WPP is axing a net 2,500 jobs under a three-year overhaul to slash costs through to the end of 2021.
It last month agreed to sell a majority stake in Kantar to private equity firm Bain Capital.
On Friday, shares in WPP surged more than seven percent to 982 pence, topping London’s benchmark FTSE 100 index in early deals, which was down 0.25 percent overall.
“WPP has been under pressure on all fronts recently and it is something of a sign of the times that the shares should react so positively to the news that sales have fallen less than expected,” noted Richard Hunter, head of markets at Interactive Investor.
“That being said, there is clearly progress being made on reducing what had become something of a sprawling empire,” he added.