WPP ad­mits just 3pc of work­ers are head­ing into its UK of­fices

The Daily Telegraph - Business - - Business - By Si­mon Foy

AD­VER­TIS­ING gi­ant WPP re­vealed that just 3pc of its UK work­force are reg­u­larly go­ing back to the of­fice as it an­nounced plans to re­sume its div­i­dend de­spite sink­ing to a huge hal­fyear loss.

WPP said that just 300 of 10,000 UKbased em­ploy­ees are work­ing in its Bri­tish of­fices, a fur­ther sign that the UK is lag­ging be­hind other coun­tries in get­ting staff back to the work­place. In com­par­i­son, 17pc of its Ger­man staff and more than three quar­ters of its Chi­nese em­ploy­ees are back in the of­fice.

It came as firm de­clared an in­terim div­i­dend of 10p per share even as it swung £2.45bn into the red af­ter slash- ing the val­u­a­tions of its busi­nesses.

The world’s big­gest ad group said trad­ing im­proved in July and it won more busi­ness than its ri­vals, sug­gest­ing the worst of the cri­sis may have passed and help­ing its shares rise 6.5pc to close at 664.4p.

Chief ex­ec­u­tive Mark Read said: “As­sum­ing there is no sec­ond wave nor ma­jor lock­downs, the sec­ond quar­ter is ex­pected to be the tough­est pe­riod of the year, al­though we re­main cau­tious on the speed of re­cov­ery.”

Mr Read added that the sur­prise re­turn to div­i­dend pay­ments could be ex­tended, even if its out­look wors­ened.

In light of the cri­sis, WPP took an im­pair­ment charge of £2.7bn as it cut the value of ac­qui­si­tions. It said the move was driven by a com­bi­na­tion of higher dis­count rates, a lower profit base in 2020 and lower in­dus­try growth rates.

Like-for-like rev­enues fell al­most 12pc to £5.6bn for the six months to June, but im­proved in the sec­ond quar­ter as trad­ing picked up. The cri­sis has shifted ad­ver­tis­ing bud­gets even fur­ther to­wards dig­i­tal mar­ket­ing, where WPP has strug­gled to hold its own against big tech be­he­moths such as Google and Face­book. WPP pre­vi­ously pulled its div­i­dend, share buy-back and 2020 guid­ance on March 31 as it braced for the im­pact of the pan­demic. The FTSE 100 firm added it was on track to make sav­ings at the up­per end of its tar­geted £700m to £800m.

An­a­lysts at Citi said: “WPP has de­liv­ered a de­cent set of re­sults at the topline which should set­tle nerves. We think for the stock to re­ally start to re­cover, how­ever, the group needs to see an in­flec­tion in growth in [the sec­ond half ].”

Rod­die David­son, an an­a­lyst at Shore Cap­i­tal, said: “The on­go­ing im­pact of the Covid-19 pan­demic on WPP’s trad­ing en­vi­ron­ment re­mains un­cer­tain and dif­fi­cult to call, and we re­main cau­tious on the out­look for ad­vert­ing spend through the re­main­der of this year. That said we are en­cour­aged by the signs of im­prove­ment, strong new busi­ness per­for­mance and fi­nan­cial strength flagged in to­day’s re­sults.”

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