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WPP shares jump as advertising giant upgrades outlook again

11:51, 28 October 2021

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WPP website homepage
WPP website homepage – Photo: Shutterstock.

WPP was the top riser on the UK’s FTSE 100, as shares jumped 6.86% Thursday afternoon, after the world’s largest advertising company topped third quarter estimates for sales growth and again raised guidance.

In a trading update, the London-based group said it now expects its core metric, known as like-for-like revenue, less pass-through costs, to grow 11.5%–12% in 2021, up from 9-10% announced in August. The firm also sees headline operating margin slightly above 14% compared to 13.5%-14% previously guided.

Advertising investments

Revenue less pass-through costs jumped 15.7% to £2.6bn for the three months ended September, above both the forecast of 9.5% growth and almost 7% up on its performance in the same quarter of pre-pandemic 2019.

WPP’s results were driven by companies spending money on new brand campaigns, digital advertising and e-commerce to tap renewed consumer spending as Covid-19 restrictions eased.

Company outlook

Chief executive Mark Read highlighted how clients across all sectors and geographies were making significant investments in marketing.

“We are now above 2019 levels in all of our business lines, and with the actions we have taken over the last three years, we are even better positioned for growth.”

The group won $1.7bn of new business in Q3 and $4.6bn year-to-date.

“Our reshaped offer - which combines creativity with technology and data, through Choreograph, with the largest global media platform in GroupM - is proving its value for existing and new clients. This is reflected in the continuation of our longstanding and successful partnership with Unilever, and the growth of our relationship with Bayer. In addition, we are delighted to have won new assignments with Beiersdorf, L'Oréal, Sainsbury's and TD Bank,” he added.

Read also said WPP continues to return excess capital to shareholders. The group has repurchased £448m shares year-to-date and expects to repurchase £600m by year end.

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“With strong client demand, a clear strategic direction and a strong balance sheet, we are well positioned to continue our momentum into 2022 and beyond,” Read concluded.

Read more: Advertising giant to pay m to settle bribery allegations

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