WPP has reported a slight increase in profit for the first half of the 2017 calendar year for its Australia and New Zealand division after the group revealed it was experiencing a stunning slowdown in ad spend globally by consumer product companies.
WPP AUNZ’s headline profit was $49.1 million for the six months to 30 June 2017 – up 4.1 per cent on the prior corresponding period – which the group attributed to a disciplined approach to cost management, better connectivity and optimisation, and working capital improvements.
Net sales grew by 0.7 per cent over the six-month period to $410 million, while WPP AUNZ’s net sales margin rose 0.4 per cent to 12 per cent.
Michael Connaghan (pictured above), chief executive of WPP AUNZ, said the results were in line with expectations.
“Despite a flat media market, our strategy of bringing together the best knowledge, thinking and talent to meet our clients’ challenges has served us well,” he said.
“In what continues to be an uncertain global market, we have delivered growth in all our key financial metrics, and made significant progress in cost synergies and operational efficiencies that positions us well to capitalise on future opportunities.
“While we remain cautious on the outlook, due to continuing external headwinds, we now have a good grasp of the levers within our control and the people culture to deliver on our purpose. We are on track to deliver mid-single digit growth in earnings per share for the full year 2017.”
WPP’s local results come after the group revealed it was experiencing dramatic decline in ad spend by FMCG and packaged goods clients due to the rise of Amazon and other e-commerce retailers.
Stocks in WPP plunged as much as 12 per cent on Wednesday after the company again slashed its revenue guidance, which is now expected to be between zero and one per cent for 2017. It’s the slowest growth the company has experienced since the end of the GFC in 2009.