As broken by B&T yesterday morning, WPP AUNZ CEO Mike Connaghan has shocked just about everyone by sensationally quitting his post.
Connaghan had been in the role for two-and-a-half years and prior to WPP’s merger with STW, he was STW’s CEO for 12 years. He will finish-up at the end of December and has not revealed his next move.
News of Connaghan’s shock departure coincided with a profit warning for the business that saw WPP AUNZ’s shares plunge a whopping 35 per cent yesterday.
It also comes amid industry speculation that Connaghan had been tasked with breaking up the company – something he was particularly loath to do.
In a statement to shareholder yesterday, WPP AUNZ said its full-year results would be below its current guidance of three per cent growth in earnings per share based on its August and September performance and its perceived outlook for the rest of this year.
The statement said that its “digital, PR and media businesses are strong and experiencing growth in the year”.
It then added: “The growth has unfortunately been offset by the underperformance of certain production businesses and creative agencies, with some 60 per cent of the reported decline against 2017 attributed to just two (unnamed) businesses.
“The turnaround and restructure of these businesses is well advanced,” the statement read.
Meanwhile, a WPP AUNZ insider has told B&T Connaghan’s deep roots with STW probably played a major role in his decision to quit WPP.
Connaghan is the son of Terry Connaghan, who started his own agency Connaghan & May in 1970, and merged it with Leo Burnett in 1991.
Connaghan junior took over as CEO of STW when John Singleton exited the business 12 years ago.
B&T’s mole suggested the requirement of WPP AUNZ’s CEO moving forward will be to essentially break up the old STW group. There are presently more than 80 different agencies within the merged STW/WPP entity and the number can no longer prove economic.
The insider expressed doubt as to whether the task of remoulding the communications behemoth’s Australian operation was something Connaghan would have had an appetite for.
They argued that having built the business up in increasingly challenging trading conditions, Connaghan was never going to be the guy who tore it all down in the name of global expediency.
Yesterday, Connaghan said via a statement to B&T: “It has been an absolute honour to lead WPP AUNZ for the past decade, from the days of STW Group through to the recent transformational merger with WPP AUNZ.
“But now that merger is complete, it is time for new leadership. During the 25 years I have spent with the business, I’ve seen it go from strength to strength.
“The group’s leadership position in this market is now unassailable and presents a terrific opportunity for fresh insights and renewed energy to move us forward at pace.
“I leave the business wishing it all the success it deserves, and in the capable hands of a strong and established leadership team that will no doubt steer it successfully through this transition period.”