WPP PLC (LON:WPP) has left its expectations for the year unchanged as the advertising giant undergoes an overhaul under new boss Mark Read.
The company, which last year saw its founder and chief executive Martin Sorrell depart following allegations of personal misconduct against him, said in an annual general meeting statement that it still predicts weaker organic revenue and margin for the year.
READ: WPP reaffirms 2019 guidance although first-quarter like-for-like sales drop due to "significant" US client losses
It estimates organic revenue will fall 1.5% to 2.0% in the year following client losses in late 2018 and strong headwinds in the first half of 2019. The headline operating margin to organic revenue is forecast to dip 1.0 point on a constant currency basis.
Medium-term targets maintained
The group’s medium-term targets, which were laid out in December, are for organic revenue growth in line with peers, a headline operating margin of at least 15% and free cash flow conversion of 80% to 90%.
"In December we set out our vision for the future of WPP, and we continue to make progress in delivering our plan to return the company to sustainable growth over the next three years,” CEO Read said.
“Our financial guidance for the full year is unchanged. We continue our programme of new investment in creativity, technology and our people, and remain absolutely focused on the needs of our clients and the interests of all our shareholders.”
Read said the group’s business performance this year has been “solid” with notable contract wins including adidas, Distell, Duracell, GSK, KangShiFu Drinks, L'Oréal, Signet and VodafoneZiggo.
Kantar stake disposal plan on track
As part of Read’s strategy to streamline the business, WPP wants to sell its majority stake in its data analytics firm Kantar.
The company said the sale was “progressing in line with our expectations” but did not provide any further details.
WPP had reportedly shortlisted a series of US buyout funds to submit binding bids for the stake in Kantar.
Private equity firms Bain Capital, Apollo and Platinum were understood to have made it through to the final stages of the auction.
WPP had looked to finalise the sale in late June.