* Q2 better than feared
* Resumes dividend, eyes share buyback relaunch
* Shares up 5%
(Adds reaction, shares)
By Kate Holton
LONDON, Aug 27 (Reuters) - WPP became one of the
first major British companies to reinstate its dividend on
Thursday, after cost cuts paid off and the world's biggest
advertising company won work to help customers market new
expanded e-commerce models.
The owner of Ogilvy, Grey and Hill+Knowlton agencies
declared an interim dividend of 10 pence per share and said it
would relaunch its share buyback when the environment
stabilises. Its shares rose 5%.
WPP posted a fall in second-quarter underlying net sales of
15.1%, compared with the market consensus for a 20% drop, and it
described its record of winning new work from clients as
industry-leading.
Chief Executive Mark Read said trading improved in July and
assuming no further major lockdown, the second quarter could
prove to be the nadir.
"We've come out significantly better than we expected
although we remain cautious about the outlook about the rest of
the year given the economic events," he told Reuters.
WPP pulled its dividend, share buyback and 2020 guidance on
March 31 as it braced for the full impact of COVID-19.
Since then, many clients in travel or hospitality have
scrapped marketing to save cash, but others have marketed new
e-commerce channels and television commercials that once took
weeks and now take 16 days to make.
It said it expected to deliver full-year underlying net
sales in line with market forecasts - which would be a decline
of around 11% - keeping it on a par with peers Publicis
and IPG in exceeding expectations.
Analysts at Citi said the results should calm nerves. "We
think for the stock to really start to recover, however, the
group needs to see an inflection in growth in the second half,"
they said.
WPP also took an impairment charge of 2.7 billion pounds
($3.6 billion), following the reassessment of acquisitions given
the impact of the virus.
($1 = 0.7571 pounds)
(Reporting by Kate Holton; Editing by Paul Sandle and Barbara
Lewis)