logo-loader

WPP shelves buyback and dividend as ad cancellations stack up

Published: 08:00 31 Mar 2020 BST

WPP PLC -

WPP PLC (LON:WPP) has suspended its £1bn share buyback and final dividend payment for last year, because of the significant uncertainty over coronavirus.

After some disruption from coronavirus in the first two months of the year, March has seen “an increasing volume of cancellations”, the FTSE 100 advertising conglomerate said.

READ: Dividend dump hits £1.5bn as UK PLC conserves cash for coronavirus battle

While short-term media spend has “largely remained committed, or diverted to alternative channels” and some project and retained work has continued in most sectors, “activity has begun to decline”. 

WPP said it it has “less certainty over our future pipeline” though it continues to pitch for new work and is seeing extra demand in our PR and communications businesses.

After the first two months saw like-for-like revenue fall 0.6%, with a 16.1% fall in Greater China offsetting a 0.4% rise across the rest of the group. 

In China, where at the peak of the coronavirus lockdown almost all staff were working from home, now more than half of the local workforce are back in the office as health restrictions are lifted.

Because of uncertainty over the immediate outlook management have withdrawn guidance for 2020 and said the final dividend will remain under review.

At the end of December, the group had cash of £3bn and total liquidity of £4.8bn, versus net debt of £1.5bn compared to £4bn a year earlier and with only a May 2020 €250mln bond due to be paid back in the next two years.

Under the share buyback, which had been funded by the sale of its Kantar market research arm, had spent £330mln so far.

FTSE rises ahead of Easter weekend, JD Sport gains on upbeat outlook -...

The FTSE 100 gained on the final morning of this shortened Easter trading week. Festive cheer was limited though, as Thames Water confirmed shareholders would not provide it with a £500 million rescue package, prompting speculation over the London supplier’s future. On a more positive...

3 minutes ago