WPP’s first results after Sorrell boost sentiment and shares
Advertising group’s management to look at restructuring and possible disposals
Martin Sorrell stepped down as chief executive of WPP following allegations of personal misconduct. Photograph: Jonathan Brady/PA Wire
The two men running WPP following the shock exit of Martin Sorrell said they would look at restructuring the group and may sell parts of it, as better than expected results provided a positive start to life without the company founder.
Digital boss Mark Read and acquisitions specialist Andrew Scott used first-quarter results from the world’s biggest advertising group to outline their initial plans to counter lower customer spending and huge technological upheaval.
Executive chairman Roberto Quarta, who oversaw the departure of industry veteran Mr Sorrell two weeks ago after an investigation into an allegation of personal misconduct, said he had asked the two executives to work on their strategy while a hunt for a new chief executive continues.
Analysts have speculated that WPP could sell its market research arm Kantar or even go as far as a full break-up of a business built up by Sorrell over more than three decades and now valued at about £15 billion.
A person familiar with the matter said WPP, owner of ad agencies JWT and Ogilvy & Mather, had been contacted by one private equity group and a venture capital firm expressing interest in the Kantar business if WPP ever decides to sell.
“We are facing a challenging environment,” Mr Quarta said. “I want to reiterate that Mark and Andrew have mine and the board’s full backing to review the strategy, make recommendations to the board and then execute.
“We will be keeping an open mind and will always go where value is for shareholders but the starting point is not a break-up.”
Mr Quarta and his executive team were helped by the fact the quarterly sales were not as bad as feared, boosting WPP shares as much as 9 per cent.
Organic net sales slipped only 0.1 per cent – compared with a 1 to 1.5 per cent drop that analysts had forecast.
But WPP, which provides advertising, data and market research to the likes of Ford, Unilever and Vodafone through its 200,000 staff in 112 countries, is still trailing peers Omnicom , Publicis and IPG. – Reuters