Advertising giant WPP (LSE: WPP) saw pretax profit collapse by 70% to £346 million in 2023, as companies worldwide slashed marketing budgets amid slowing growth and rising rates. However, the group expressed confidence in improved prospects ahead.
Overall revenue remained resilient, up 3.2% to £14.85 billion, WPP said Thursday. But stripping out pass-through costs, sales edged up just 0.9% to £11.86 billion, marginally missing forecasts. Performance was hindered by a 4.5% drop in US revenue, while China and Germany also declined.
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Still, WPP hailed “solid” new contract wins and an improving pipeline. It forecasts up to 1% sales growth this year, with profit margins expanding up to 40 basis points.
The results underline the stark impact of recent cuts in ad spending, although WPP sees light at the end of the tunnel.
Shares in WPP eased 2.9% to 757.65 pence in morning trade morning. The stock is down 25% over the past year.