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WPP, the London-based advertising agency searching for a new chief executive, has slashed its forecast for revenues and profits this year, blaming a “challenging economic backdrop”.
The group said on Wednesday that like-for-like revenue in 2025 when removing pass-through costs — the fees paid to external suppliers — would decline by 3-5 per cent after poor trading in the first half of the year.
This marks a sharp downgrade from its previous expectations of flat to down 2 per cent for the year. That estimate was based partly on an assumption that new business would pick up through the year, which WPP said has failed to materialise.
WPP said that macro economic conditions had weighed heavily on client spending and that there had been less new business than expected. That would lead to a decline in headline operating profit margin of 50 to 175 basis points for the full year, it added.
Like-for-like revenue would decline by 4.2 per cent to 4.5 per cent in the second half, following a fall of up to 6 per cent in the second quarter, it said.
Mark Read, the chief executive who announced his departure in June after a 30-year career with the agency, said: “Since the start of the year, we have faced a challenging trading environment with macro pressures intensifying and lower net new business.”
