WPP PLC (LSE:WPP) reported a sharp fall in profits and cut its interim dividend by half, as the advertising group's interims were in line with its recent trading update.
Facing pressure from weaker client spending and slower new business activity, revenue for the first six months of 2025 fell 7.8% on a reported basis to £6.66 billion, while revenue less pass-through costs declined 4.3% on a like-for-like basis.
Headline operating profit tumbled 29% to £412 million, as margins shrank by 2.9 percentage points, while reported operating profit dropped 47.8% to £221 million, impacted by a £116 million goodwill impairment.
CEO Mark Read, who will step down at the end of August, said that amidst the market challenges WPP has made "significant progress on the repositioning" of its Media segment, ie redundancies and more investment in AI, with severance costs weighing on margins.
WPP Media is now "well advanced on its plan to create the next generation of AI-enhanced data and marketing solutions for clients, delivered through the industry's most powerful and secure infrastructure".
Top 25 clients held broadly flat in H1, but sector and regional pressures were evident. China revenue fell 16.6%, while North America declined 2.4%.
The company reaffirmed its 2025 outlook, including a 3% to 5% decline in LFL revenue less pass-through costs and a 50 to 175 basis point drop in headline operating margin.
New CEO Cindy Rose will take over on 1 September, with a review of strategy and capital allocation expected, where Read said the "priority is to drive sustainable growth supported by an appropriate level of financial flexibility while balancing returns to shareholders".