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Prices & Quotes - UK Markets - WPP (WPP)

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Share Price:
Up 922.20p
Change Today:
34.00p
Market Cap:
11,300m
Sector:
Media

WPP to increase dividend and restart buybacks

By Sean Farrell

Date: Thursday 17 Dec 2020

LONDON (ShareCast) - (Sharecast News) - WPP said it would increase its dividend each year and restart share buybacks as the world's biggest advertising company by sales set out plans for growth.
WPP scrapped its dividend and buybacks early in the Covid-19 crisis but surprised analysts by reinstating the dividend in August. On Thursday WPP said it would the payout would rise in 2020 and beyond, returning about 40% of headline earnings per share to investors.

The FTSE 100 group also said it expected to restart buybacks in 2021 funded by the proceeds of its sale of a stake in Kantar in 2019.

WPP said it would cut 600m of annual costs by 2025 and spend up to 400m a year on acquisitions to expand in ecommerce and other areas. WPP said it would reinvest about two-thirds of the cost savings in people and technology to support growth.

The company was already in a turbulent period before the Covid-19 crisis hit advertising spending and accelerated the shift to online business. After the acrimonious departure of founder Martin Sorrell in 2018 the company is trying to simplify the sprawling business he created and catch up with trends in digital advertising.

Mark Read, WPP's chief executive, said: "The events of 2020 have only accelerated the structural changes in our industry, from the expansion of digital channels to growing demand for ecommerce solutions. We are converting our size into scale, making us more effective and efficient as we share expertise across a simpler company of stronger agency brands."

WPP said trading in October and November was as expected with revenue excluding pass-through costs down 6.7%. Annual like-for-like revenue less pass-through costs will drop by about 8.4% - the rate for the first 11 months of the year, WPP said.

Russ Mould, investment director at AJ Bell, said: "The latest update from advertising agency WPP suggests it was more a case of growth disrupted and delayed than entirely deflated by coronavirus.

"In the context of a year of dividend disappointment the increase in the dividend announced today and a renewed share buyback programme, plus a commitment to increase capital returns to shareholders in the longer term, will be greeted like a glass of water in a desert."

The headline operating profit margin for 2020 is expected to be 12.5-13%, reflecting "very strong" cost reduction activity, WPP said. Year-end net debt will be about 1.6bn.

WPP also said it had agreed to pay A$0.70 a share in cash to take full control of its business in Australia and New Zealand. The deal values the remaining shares at about A$230m.



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WPP Market Data

Currency UK Pounds
Price 922.20p
Change Today 34.00p
52 Week High 928.00p
52 Week Low 483.70p
Volume 3,267,916
Shares Issued 1,225.33m
Market Cap 11,300m

Performance Indicators

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What The Brokers Say

Strong Buy 10
Buy 2
Neutral 7
Sell 1
Strong Sell 2
Total 22
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

WPP Dividends

  Latest Previous
  Interim Interim
Ex-Div 08-Oct-20 03-Oct-19
Paid 06-Nov-20 04-Nov-19
Amount 10.00p 22.70p

Trades for 08-Mar-2021

Time Volume / Share Price
16:35 1,133,656 @ 922.20p
16:29 360 @ 923.20p
16:29 121 @ 923.00p
16:29 337 @ 922.80p
16:29 245 @ 922.60p

WPP Key Personnel

CEO Mark Read
CFO John Rogers