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LONDON (Alliance News) - Advertising firm WPP PLC held its dividend Friday after 2018 results were at the upper end of expectations, despite profit sinking a third on weaker revenue and higher costs and forecasts of a challenging 2019.
In 2018, pretax profit narrowed 31% to GBP1.46 billion from GBP2.11 billion the year prior. On a constant currency basis, profit dropped 28%.
This was after revenue fell 1.3% to GBP15.60 billion from GBP15.80 billion the year before, up 0.8% on a like-for-like basis. Billings, however, rose 3.3% to GBP55.80 billion from GBP55.59 billion the year prior, up 3.2% on a like-for-like basis.
Profit performance also suffered from a rise in general & administrative costs increasing to GBP1.51 billion from GBP1.28 billion the year before.
"Our results for 2018 are at the upper end of the guidance we provided in October, with like-for-like revenue less pass-through costs down 0.4%," WPP Chief Executive Officer Mark Read said.
WPP proposed to hold its final dividend per share at 37.3 pence, also keeping its 60.0 pence final dividend flat on the year before.
"As we have said previously, 2019 will be challenging - particularly in the first half - due to headwinds from client losses in 2018," Read added. "However, we start the year with fewer clients under review than we did in 2018, and investments in creativity and technology will further improve the competitiveness of our offer."
In 2019, the FTSE 100-listed firm expects like-for-like revenue - excluding pass through costs - to be down between 1.5% and 2.0%. Headline operating margins to revenue is also expected to be around 1.0 margin points lower than the 16.0% reported in 2018.
"Since September, we have made good progress in implementing the new strategy for WPP", Read said. "We are at the beginning of a three-year turnaround plan, but WPP's new positioning as a creative transformation company with stronger, more integrated, more tech-enabled agencies is already proving effective, having driven several of our recent new business successes. As we implement our strategy in 2019 we will continue to put creativity, technology and great work for clients at the heart of our own transformation."
