Shares in WPP fell hard in London after the world’s biggest advertising company released its annual results and forecasted flat organic growth for the year ahead.
At the close of trading in London, WPP shares were down 16% to 761.60 pence, the lowest point in eight years.
The company, in the second of a three-year turnaround plan in the face of account losses and competition from digital giants Google and Facebook, posted a drop in organic sales of 1.6% in 2019.
In the fourth quarter, organic sales fell 1.9% compared to 0.5% growth for the previous three months.
Like-for-like full year revenue was flat in 2019 at GBP13.23 billion. Total billings were down 1% to GBP53 billion.
However, CEO Mark Read, who took over from founder Martin Sorrell in September 2018, says 2019 was the foundational year for WPP strategy and he is confident of further progress.
He’s optimistic about the future of the advertising industry and WPP’s position within it but says there is still much more work to do.
“We said that we would make progress in the journey to return WPP to growth, simplifying our business and reducing our debt, and we have delivered against each of these goals – having met our guidance for 2019, achieved our restructuring targets and completed the sale of a majority stake in Kantar.
“The second half of 2019 was stronger than the first, with performance improving globally and in the US, our largest market.
“Our new offer of creativity powered by technology has resonated with clients, as we’ve seen in good retention rates and important wins.”
New creative assignments include Instagram and Mondelez. AXA, eBay and Hasbro were among the media wins.
“Perhaps most importantly, our clients and our people tell us that WPP has a clear new sense of purpose and is successfully instilling a culture of creativity, collaboration and openness,” says Read.
The company says it's too early forecast any impact from the coronavirus outbreak.
The 2019 numbers:
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