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05 Aug 2021 | 07:09

WPP ups outlook and returns as markets revive

(Sharecast News) - WPP upgraded its outlook and boosted shareholder returns as the advertising company swung back to profit in the first half of 2021. The FTSE 100 group reported a £394m pretax profit for the six months to the end of June compared with a £3.2bn loss a year earlier as reported revenue less pass-through costs rose 5% to £4.9bn and 11% on a like-for-like basis.

WPP increased its interim dividend by 25% to 12.5p a share and said it would buy back £350m shares in the second half. The company said it expected organic growth of 9-10% in 2021 - up from earlier guidance of mid-single digits. Headline operating margin will be towards the top of the 13.5-14% range.

The company said its performance was supported by a market recovery that was stronger than expected. The recovery spanned all markets, bolstered by vaccination programmes and government stimulus measures.

"We have seen a strong recovery in the first half of the year, with LFL growth in revenue less pass-through costs across all sectors and most major markets," Chief Executive Mark Read said. "We are confident of further good growth in the second half."

Performance was strong for clients in consumer packaged goods, technology and healthcare and pharmaceutical sectors, which make up 54% of revenue for designated clients. WPP's public relations businesses had high demand for advice on sustainability matters.

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