WPP PLC, the London-based company that owns agencies such as Ogilvy and GroupM, has seen its shares rise by 5.97% on the FTSE 100. The company has increased its medium-term operating profit margin guidance and is confident that its full-year results will meet expectations.
Positive Outlook
Shares of WPP PLC are up at 51.2 pence, marking a 6.8% increase to 830.20 pence. While shares have experienced a decline of 12% over the past year, the recent positive developments have brought renewed optimism.
Upgraded Guidance
WPP PLC now expects a medium-term headline operating profit margin of 16.0%-17.0%, up from the previous guidance of 15.5%-16.0% given in 2020. Additionally, the company anticipates more than 3% growth in revenue less pass-through costs over the medium-term, an improvement from the previous guidance of 3%-4%.
Looking Ahead
For the year 2023, WPP PLC predicts that results will meet prior guidance. This includes a projected growth in like-for-like revenue less pass-through costs of 0.9%, compared to the previous guidance range of 0.5%-1.0%. The company also expects to achieve a headline operating profit margin of 14.8%, or 15.0% on a constant-currency basis.
Future Growth Plans
Looking further ahead to 2024, WPP PLC envisions a growth range of 0%-1% in like-for-like revenue less pass-through costs, along with an improved headline operating profit margin by 20-40 basis points when excluding foreign-exchange effects.
The company’s future business strategy will emphasize disciplined capital allocation and organic investment. Additionally, WPP PLC plans to pursue mergers and acquisitions with a disciplined approach. The company aims to deliver annualized net cost savings of GBP125 million by 2025, with a significant portion expected to be achieved in 2024.
CEO’s Optimism
WPP PLC’s CEO, Mark Read, expressed confidence in the company’s ability to accelerate growth over the medium term remarking, “While we had to navigate a more challenging environment in 2023, we see strong future demand for our services and are confident we can accelerate our growth over the medium term.”
