WPP PLC on Wednesday said it agreed to sell its stake in FGS Global, as it reported broadly flat revenue but successful cost containment in the first half.
The London-based advertising and public relations firm said pretax profit jumped 66% to £338 million in the six months that ended June 30 from £204 million a year before.
Revenue edged up 0.1% to £7.23 billion from £7.22 billion.
WPP maintained its interim dividend at 15.0 pence per share.
Total headline operating costs were reduced by 3.7% to £4.95 billion from £5.15 billion, while adjusted net debt fell 2.9% to £3.4 billion from £3.5 billion.
Chief Executive Officer Mark Read said: ‘Our second quarter performance delivered sequential improvement in net sales with continued growth in GroupM, Ogilvy and Hogarth and sequential improvement at Burson, VML and our Specialist Agencies.
‘Importantly, we also saw North America return to growth in the second quarter. That said, we have seen pressure in China and in our project-related businesses which, together with an uncertain macro environment, has led us to moderate our expectations for the full-year.’
Staff costs, excluding incentives, fell 3.3% to £3.84 billion from £3.97 billion reflecting higher wage inflation, offset by action taken to lower headcount.
Establishment costs were down 11% to £242 million, IT costs fell 2.6% to £341 million, and personal costs were reduced 8.0% to £103 million.
Revised guidance foresees like-for-like revenue less pass-through costs growth of negative 1% to 0%, trimmed from 0% to positive 1% previously.
Also Wednesday, WPP said it agreed to sell its entire majority stake, approximately 50%, in strategic communications and advisory firm, FGS Global Ltd, to an acquisition vehicle with funds managed or advised by private equity firm Kohlberg Kravis Roberts & Co LP.
‘This transaction better positions WPP to focus on and invest in its world-class creative, media and corporate and consumer public relations businesses to deliver growth while strengthening the group’s balance sheet,’ WPP said.
The consideration for the sale is $775 million, payable in cash at completion which is expected before the end of 2024.
WPP shares were down 2.0% to 702.73 pence each in London on Wednesday morning.
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