WPP Profits Slump 30% to $2.62 Billion Following Sorrell’s Ousting

WPP Profits Slump 30% to $2.62 Billion Following Sorrell’s Ousting
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WPP have reported a profit slump of 30 per cent to AU$2.62 billion following the ousting of the advertising empire’s founder Martin Sorrell last April.

Mark Read, Sorrell’s replacement, revealed WPP sold 36 businesses in the past year, raising £849 million (AU$1.5 billion) with more disposals on the way.

Read said while client losses have been stemmed, 2019 “will be challenging” due to the fallout from clients leaving last year.

Due to the overhaul and departure of clients, including parts of Ford, WPP’s revenues were down 2.6 per cent to  £12.8 billion (AU$23.9 billion).

Sorrell was deposed of in April last year over the controversy surrounding the founder using corporate money for personal purposes and allegations about prostitutes, which he denied.

Read also unveiled a three-year strategic plan on Friday to make the company “more client-centric” and continue to sell businesses, including data firm Kantar.

He furthermore said the shareholder base has not significantly changed and the investors are supportive, adding: “I think they understand what we need to do”.

American Express and United Airlines are among the big-name clients who left WPP last year.

WPP paid out £68 million (AU$127 million) in severance to departing staff and £302 million (AU$564 million) in “restructuring and transformation” costs.

Analysts at the UK investment banking firm Liberum said while guidance for 2019 was on par with expectations, “margins should hold up better than we would have thought”.

WPP was founded by Sorrell in 1986 and owns major agencies such as Ogilvy and JWT.

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