WPP share price: where next after impressive half-year results?

Over the last 12 months, WPP has seen its share price tumble more than 20%, with the advertising and PR giant struggling to navigate the exceptionally challenging environment on account of its sheer size.

However, this year the company embarked on a three-year turnaround plan that has proven successful, a fact reflected in its half-year results and its stock climbing more than 12% on a year-to-date basis.

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WPP turnaround sees early results

The company’s performance in the second-quarter came in slightly above its own forecasts and remaining in line with its full-year guidance and three-year strategic targets.

WPP recorded a 1.6% rise in revenue to £7.62 billion, though its pre-tax profit came in 43.5% lower at £478 million compared with the same period a year ago. However, its full-year guidance remains unchanged and the half-year dividend was held at 22.7p a share.

‘Clients are responding well to our new offer, as evidenced by recent wins and expanded assignments including from eBay, Instagram and L’Oréal. An encouraging number of our businesses and markets are achieving good growth,’ WPP CEO Mark Read said.

‘That said, we are still in the early stages of our three-year turnaround plan, and we remain focused on returning the company to sustainable growth over that period. Our guidance for the full year is unchanged.’

WPP sells down stake in Kantar

In July, WPP agreed to sell 60% of media group Kantar, a move that has generated around £3.6 billion in capital. Around £1.9 billion of that figure will reduce the company’s leverage to the low end of its target range, while £1.2 billion will be returned to shareholder, the company said.

Over the last 15 months, WPP has made 44 disposals, further simplifying the group and positioning the business for future growth.

‘The progress we have made and the positive new business momentum are reasons for optimism,’ Read said. ‘As a creative transformation company with stronger, more tech-enabled agencies, we are well placed for the future as clients look for modern partners to help them navigate an increasingly complex and challenging marketing landscape.’