WPP Experiences a 16% Drop, Dominantly Driving FTSE 100 Down Due to Profit Announcement Revision
**WPP's 2025 Financial Outlook Revised Downward Amidst Challenging Market Conditions**
London, United Kingdom — Global advertising giant WPP has announced a significant revision to its financial outlook for 2025, following a deterioration in first-half trading and ongoing macroeconomic headwinds.
The company's like-for-like (LFL) revenues, excluding pass-through costs, are expected to decline by 4.2% to 4.5% year-on-year for the first half of 2025, with a steeper decline of 5.5% to 6.0% in Q2. This reflects weaker client spend and lower net new business, according to WPP's analyst Aarin Chiekrie of Hargreaves Lansdown.
Headline operating profit is projected to be £400–£425 million, translating to a margin of 8.0–8.5%, down 280–330 basis points year-on-year (excluding foreign exchange effects).
Notable segment declines have been observed in North America and WPP’s Global Integrated Agencies, particularly impacting WPP Media and Ogilvy.
In an effort to mitigate these losses, WPP is implementing aggressive cost-cutting measures, with severance actions at WPP Media anticipated to unlock over £150 million in annualized gross cost savings. However, these are expected to have a broadly neutral impact on margins in 2025.
The revised full-year guidance now forecasts a decline in LFL revenues by 3% to 5%, compared to prior guidance of flat to a 2% decline. The operating profit margin is expected to fall by 50–175 basis points year-on-year (excluding FX), compared to previously expected flat margins.
WPP's share price tumbled by over 17% following the announcement of the revised outlook. The company was leading the FTSE 100 lower in midweek trade, down 15.6%.
Chiekrie commented that "restructuring is proving a distraction for management and weighing on margins." He further noted that "there's not likely to be much let-up over the second half either."
Mark Read, who has held the top job since WPP founder Martin Sorrell left the company in 2018, recently announced plans to retire as chief executive on 31 December. The hunt for a new CEO continues for WPP.
The start of 2025 has been described as "poor" for WPP, with the company facing ongoing pressure from macroeconomic uncertainty, reduced client spend, and lower new business wins. Despite these challenges, WPP remains optimistic about its future prospects and is committed to delivering sustainable growth for its shareholders.
- Amidst ongoing challenges in the advertising industry, particularly in North America and at WPP's Global Integrated Agencies, WPP's CEO Mark Read is leading the company through a difficult period, marked by declining financial performance in the first half of 2025.
- In the realm of finance and business, WPP's revised financial outlook for 2025 paints a picture of turbulence in the industry, as the company grapples with reduced client spend, weaker new business, and the impact of macroeconomic conditions, causing its share price to plummet.
