WPP Group PLC (LON:WPP), the FTSE100 ad agency, has decided to pay an interim dividend in spite of racking up a £2.6bn loss in the first half of 2020.
Chief executive Mark Read said WPP was on a stronger financial footing than it had been. It has £4.7bn of 'liquidity' thanks mainly to the sale of a majority stake in the consulting group Kantar, and a falling cost base.
“As a result, we are able to return to paying our dividend, with an interim dividend of 10p for 2020," he added.
The advertiser added, however, that its final dividend, which was halted in March, is to be cancelled permanently, effectively meaning the dividend has been rebased.
Read added that current trading is showing sequential improvement on the previous quarter but added the market remains volatile:
In July. underlying net revenue dropped by 9.2% compared to a 15.1% fall in the three months to June.
For the full year, WPP is expecting a decline of between 10% and 11.5%
Revenue in the first half was £5.6bn, down from £6.4bn in the first half of 2019. On a net basis revenue was £4.7bn (£5.2bn) while underlying profits fell 44% to £276mln.
Impairments of £2.7bn relating to earlier acquisitions and Y&R Rubicon, in particular, meant a loss of £2.6bn.
"Assuming there is no second wave nor major lockdowns, the second quarter is expected to be the toughest period of the year, although we remain cautious on the speed of recovery,” said Read.