Sir Martin Sorrell (below) has had another pop at WPP in an interview with Financial News, saying people at WPP see their job as a “burden” these days and that the W in WPP seems to stand for Wunderman as Wunderman as its people have emerged on top in the merger with JWT: “a lot of Wunderman people seem to have been promoted. There is a feeling of sycophancy and that friends are being elevated rather than the more talented people.”
He also said of Read’s £300m provision for restructuring WPP in 2019: “If you make a £300m provision, that means you pretty much insulate yourself for 2019. The acid test for WPP will be in 2020, because that’s when the provisions will run out.”
Sorrell says that, as a shareholder, he finds all this worrying as he doesn’t think there’s a “strong direction” for the company.
He’s entitled to his view, of course, and Read still has to prove he can get to grips with the marcoms giant’s big problems in North America where sales fell by 8.5 per cent in Q1 2019. But it’s hard to argue that Sorrell would have done any better as WPP was on the slide before he left in controversial circumstances 15 months ago. WPP’s creative agency brands – chiefly Grey, JWT, Ogilvy and Y&R (since merged with another digital network VML) – hadn’t prospered in Sorrell’s latter years in charge as he created bespoke agency teams and even agencies to handle bigger clients.
Sooner or later Read has to get the share price moving steadily upward and he can only do that by reversing the sales decline – and not just in the US.
Otherwise WPP will be seen by investors as, at best, an under-valued stock that may attract a buyer or buyers – rather like the Kantar research operation it’s trying to sell.