Shares in WPP were smashed after the global advertising company added more red ink to its full year revenue outlook.
In a first half trading update, WPP downgraded the like-for-like revenue outlook to -3% to -5%, from previous flat to -1%.
The UK-based company's shares fell more than 18% to 428.60 pence.
WPP globally is going through a restructure, with its CEO Mark Read due to be replaced this year, and has been under pressure with revenue in negative territory, a weak share price and pushback from staff on the back to the office mandate.
“With the expectation of continued macro uncertainty weighing on client spend and weaker net new business than originally anticipated, we are reducing our guidance,” the company said in the latest trading update.
WPP said performance had deteriorated as the June quarter progressed against a “challenging economic backdrop”.
The company anticipates first half like-for-like revenue less pass-through costs to fall -4.2% to -4.5%, with a decline of -5.5% to -6% in the June quarter.
“One-off factors” were behind the below expectations results.
Lower revenue coupled with “severance action” at WPP Media would result in first half headline operating profit in the range of £400 million to £425 million, which is consistent with a margin decline of 280 to 330 basis points.
“Since the start of the year, we have faced a challenging trading environment with macro pressures intensifying and lower net new business,” said CEO Mark Read.
“While we expected the second quarter to be similar to the first quarter, performance in June was worse than anticipated and we expect this pattern of trading in the first half to continue into the second half.
“Our focus remains on ensuring the right balance between investing in the business for the long-term and continuing to reduce structural costs, while taking appropriate actions to respond to the current trading environment.”
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