Share Prices & Company Research

Market News

17 Dec 2020 | 07:05

WPP to increase dividend and restart buybacks

(Sharecast News) - WPP said it would increase its dividend each year and restart share buybacks as the world's biggest advertising company by sales set out plans for growth. WPP scrapped its dividend and buybacks early in the Covid-19 crisis but surprised analysts by reinstating the dividend in August. On Thursday WPP said it would the payout would rise in 2020 and beyond, returning about 40% of headline earnings per share to investors.

The FTSE 100 group also said it expected to restart buybacks in 2021 funded by the proceeds of its sale of a stake in Kantar in 2019.

WPP said it would cut £600m of annual costs by 2025 and spend up to £400m a year on acquisitions to expand in ecommerce and other areas. WPP said it would reinvest about two-thirds of the cost savings in people and technology to support growth.

The company said trading in October and November was as expected with revenue excluding pass-through costs down 6.7%. Annual like-for-like revenue less pass-through costs will drop by about 8.4% - the rate for the first 11 months of the year, WPP said.

Mark Read, WPP's chief executive, said: "The events of 2020 have only accelerated the structural changes in our industry, from the expansion of digital channels to growing demand for ecommerce solutions. We are converting our size into scale, making us more effective and efficient as we share expertise across a simpler company of stronger agency brands."

The headline operating profit margin is expected to be 12.5-13%, reflecting "very strong" cost reduction activity, WPP said. Year-end net debt will be about £1.6bn.

WPP also said it had agreed to pay A$0.70 a share in cash to take full control of its business in Australia and New Zealand. The deal values the remaining shares at about A$230m.

Get in touch today
Join Redmayne Bentley
Talk to us now about opening a new account or transferring your account from another provider
0113 243 6941
Get in touch today
Contact your local office
Contact your local office to find out more
The value of your investments and the income from them may go down as well as up, and you could get back less than you invested.
Continuing our Personal Service: View our Latest COVID-19 Update: 7th October 2021
We use cookies on this site to improve your experience and help us provide you with a better website. An explanation of the cookies we use and their purpose can be found within our Cookie Policy. Your continued use of this site means you consent to the use of cookies.