Write-downs see ad giant WPP tumble into the red

Advertising giant WPP has written down the value of some of the businesses it has bought – pushing it into a major loss for the first six months of the financial year.

The marketing business saw the first half of last year’ s £409 million pretax profit totally annihilated during the Covid-19 months as it lost nearly £2.6 billion.

W PP said it had taken £2.7 bn of impairments, which helped flip it deep into the red, around the acquisition of some of its subsidiaries.

The write-downs were triggered by the Covid-19 pandemic as companies had to give higher discounts and made less profit in an industry where growth slowed down.

WPP also reported a 12.3 per cent drop in revenue to just under £5.6bn in the first half of the financial year.

The business now hopes that the worst is behind it, and that the second quarter will be the most painful period. But this is reliant on there not being a second wave of Covid-19, and no major lockdowns, it said.