WPP is now in the intensive care ward with new head surgeon CEO Cindy Rose announcing a strategic review following a disastrous Q3 performance with revenue diving 8.4% compared to last year, 11% including pass-through costs. Its preferred organic measure of growth fell to -6% but that’s largely academic when revenue is draining away at this rate. WPP blamed poor performance at WPP Media.
Rose (above), trying to strike an upbeat note, says:” “My ambition is for WPP to lead our industry in terms of innovation, client delivery and organic growth. However, I acknowledge that our recent performance is unacceptable and we are taking action to address this.
“We have strong foundations and the ingredients needed to succeed. We have amazing long-standing clients that represent the largest, most well-known brands in the world, strong capabilities and world-class talent that spans media, production and creative, some of the most consequential agency brands in the market, unrivalled global scale and reach, and market-leading technology and technology partnerships that give us a real competitive edge. This is an exciting platform to build on.
“To deliver performance improvements, we will position our offering to be much simpler, more integrated, powered by data and AI, efficiently priced and designed to deliver growth and business outcomes for our clients. We will significantly improve our execution, strengthening our go-to-market and dramatically simplifying how we organise ourselves internally, as well as building a high-performance team culture.
“We will expand our addressable market by pushing harder into enterprise and technology solutions. And finally, we will take a disciplined approach to capital allocation with a focus on cost efficiency and maintaining a strong balance sheet while prioritising the parts of our business where we can deliver the greatest shareholder value.”
Will Rose be given the time she clearly needs if she’s to be the overdue agent of change at WPP. Looking into these numbers WPP is in danger of running short of cash soon, certainly in terms of maintaining its generous dividend payments. An injection of shareholder cash via a rights issue or substantial forced disposals may well be required.
