WPP’s Revenue Back To Pre-COVID Levels, As Digital Ad Spend Soars

WPP has revealed its revenues have returned to pre-COVID levels a year earlier than the world’s biggest advertising group had expected after a resurgence in global marketing expenditure fuelled by digital media.

Releasing its half-year update overnight, London head office announced first-half revenues of £6.1 billion ($A11.4 billion), a year-on-year increase of 16 per cent on a like-for-like basis.

WPP had previously predicted that it would take until the middle of next year for pandemic savaged revenues to recover.

Digital media was capturing much of WPP’s growth, while adding that the recovery in its traditional channels was more muted.

That said, WPP saw ad spends had risen “across all sectors”, namely led by digital, while TV ad spends globally were growing at a slower pace.

WPP’s board declared an interim dividend of 12.5 pence ($A0.23), an increase of 25 per cent, after pre-tax profits improved from £276 million ($A519 million) the same period a year ago to £502 million ($A944 million).

Shares in WPP have risen 21 per cent since the start of 2021, while its share price was up 2.9 per cent on receipt of yesterday’s news.

Highlights of the report included:

Commenting on the numbers, WPP CEO Mark Read (main photo) said: “I’m delighted with our performance in the first six months of the year, at a time when COVID continues to take a toll on many countries. The like-for-like revenue less pass-through costs growth rate of 19.3 per cent in the second quarter is our highest on record, as clients reinvest in marketing, particularly in digital media, ecommerce and marketing technology. We have returned to 2019 levels in 2021, a year ahead of our plan, with good momentum into 2022.

“We’ve also made very good strategic progress. Our recognition as the most awarded company at the 2021 Cannes Lions Festival reflects our investment in creative talent and the strength of our creative work over the past two years.

“Our focus on data, commerce and technology, through strategic acquisitions, organic investments and the launch of Choreograph, has supported a strong new business performance. Key assignment wins include AstraZeneca, Bumble, JP Morgan Chase and Pernod Ricard.

“In procurement, property and shared services, we are making strong progress as part of our overall transformation programme. We have significantly increased our incentive pools in the first half, to reflect the tremendous contribution of our people in these challenging times, and in line with our intention to reinvest in talent announced at our Capital Markets Day in December 2020.

“We expect our strategy to translate into benefits for all of our stakeholders: a powerful, modern offer to support our clients’ growth; a great place for our people to work; a positive contribution to communities and the environment; and good financial returns for shareholders, with the interim dividend raised 25% and £600 million of share buybacks planned in 2021,” Read said.

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Mark Read WPP