WPP invests deeper in STW Communications

Pippa Chambers
By Pippa Chambers | 7 October 2015

Australia’s largest agency holding company STW Communications, which owns the likes of full-service agency lkon, JWT and Oglivy, has given another chunk of its shares to WPP.

A notice on the ASX shows that Cavendish Square Holdings, which operates as a subsidiary of WPP, and is based in the Netherlands, has bought more shares, bringing WPP's stake in STW to 23.55%.

Upping of WPP's stake only flames rumours of a takeover, particularly given STW's tough time.

Speaking to AdNews in February, STW CEO Michael Connaghan called the group's 2014 full year financial results “disappointing”, as it posted a 7.8% drop in underlying net profit after tax (NPAT) to $45.6million and announced it was undertaking a strategic review.

At the time, Connaghan said: “We wanted to come here today and make no bones about the fact that we were very disappointed in our performance. The earnings slide of 7.8% is just not up to our standard.”

In May it then announced that Ikon's Sydney shop would go full service as the STW Group attempts to create scale within its businesses.

In August this year STW then reported a 22.5% drop in net profit after tax (NPAT) of $15.1 million from 19.5% in the prior corresponding period as a result of “significant client losses” last year, in its half year results.

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