WPP shares plunge amid poor quarter and guidance cut
It now expects full year like-for-like net sales to fall by between 0.5% and 1%.
Shares in WPP collapsed after the firm trimmed full year guidance, reported lower than expected third quarter sales and confirmed that it wants to offload a stake in Kantar.
The advertising giant, which has been rocked by the departure of founder and chief executive Sir Martin Sorrell, saw like-for-like sales fall 1.5% in the three months to September 30, a worse performance than City analysts had forecast.
Overall revenue declined 0.8% to £3.76 billion in the quarter. In addition, it now expects full year like-for-like net sales to fall by between 0.5% and 1%, a downgrade on previous guidance.
Shares tumbled over 20% to around 870p in morning trade.
Chief executive Mark Read said that turning the firm around will require “decisive action and radical thinking”.
To this end, he announced that WPP’s is examining “strategic options” for its market-research unit Kantar.
“We believe in the potential for Kantar but given our many priorities, we need to make tough choices and we believe that the best way to unlock this potential is with a strategic or financial partner,” he said.
“The board has approved a formal process to review the strategic options that will maximise share owner value.
“It is envisaged that WPP will remain a share owner with strategic links to ensure that the benefits to clients are realised. Preparations are underway, involving Kantar management, and unsolicited expressions of interest have been received.”
Mr Read is in the hot seat following the departure of long-standing boss Sir Martin in controversial circumstances earlier this year.
Sir Martin left the company he founded more than 30 years ago, following allegations of personal misconduct.
His departure remains mired in controversy, with WPP carrying out an inquiry into allegations that he misused company funds, but the details of the investigation were never revealed.
He has since gone on to start up a rival business