WPP sees £2.17bn wiped off its stock market value



25.10.2018 10:13

FTSE 100 stalwart WPP lost £2.17bn of its stock market value today after a profit warning sent its shares plunging by 17 per cent.

The UK advertising giant - recently rocked by the departure of founder and boss Sir Martin Sorrell - told the City that sales were disappointing in the last quarter and that full-year sales would be lower than expected.

Chief executive Mark Read said that turning the firm around will require 'decisive action and radical thinking'. Traders fled the shares, which fell by 180.2p to 875.8p - a drop of 17 per cent.

Mark Read is in the hot seat at advertising giant WPP following the departure of long-standing boss Sir Martin in controversial circumstances earlier this year.

WPP said like-for-like sales fell 1.5 per cent in the three months to September 30, a worse performance than City analysts had forecast.

Overall revenue declined 0.8 per cent to £3.76billion in the quarter. In addition, it now expects full year like-for-like net sales to fall by between 0.5 per cent and 1 per cent, a downgrade on previous guidance.

Mr Read said that in order to raise cash WPP's is examining 'strategic options' for its market-research unit Kantar.

'We believe in the potential for Kantar but given our many priorities, we need to make tough choices and we believe that the best way to unlock this potential is with a strategic or financial partner,' he said.

'The board has approved a formal process to review the strategic options that will maximise share owner value.

'It is envisaged that WPP will remain a share owner with strategic links to ensure that the benefits to clients are realised. Preparations are underway, involving Kantar management, and unsolicited expressions of interest have been received.'

Mr Read is in the hot seat following the departure of long-standing boss Sir Martin in controversial circumstances earlier this year.

Sir Martin left the company he founded more than 30 years ago, following allegations of personal misconduct.

His departure remains mired in controversy, with WPP carrying out an inquiry into allegations that he misused company funds, but the details of the investigation were never revealed.

He has since gone on to start up a rival business.



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