WPP Withdraws Guidance and Suspends Buyback, Dividend
March 31 2020 - 3:04AM
Dow Jones News
By Adria Calatayud
WPP PLC said Tuesday that it is withdrawing guidance for 2020
and has suspended its buyback program and final dividend for last
year to maintain liquidity amid uncertainty caused by the
coronavirus pandemic.
The London-based advertising giant said like-for-like net sales
fell 0.6% in the first two months of the year, but rose 0.4%
excluding the greater China region. In March, WPP's performance has
weakened, reflecting the spread of the virus and
government-containment actions, it said
The suspension of the buyback and 2019 final dividend will
preserve around 1.1 billion pounds ($1.36 billion) of cash, the
company said. The company said it will continue to review the
status of the 2019 dividend.
The company is also freezing new hires, reviewing freelance
expenditure, stopping discretionary costs and postponing planned
salary increases for 2020. WPP's executive committee members, as
well as its directors, have committed to a 20% reduction in their
salaries or fees for an initial period of three months. These
measures will save between GBP700 million and GBP800 million, it
said.
WPP said it has identified savings in excess of GBP100 million
in property and IT capital expenditure, around a quarter of its
initial budget for 2020.
WPP said it expects the impact of Covid-19 on the business will
increase in the second quarter but it isn't possible at this stage
to quantify the depth or duration of the impact.
As of Dec. 31, the company had cash of GBP3.0 billion and total
liquidity of GBP4.8 billion, while net debt stood at GBP1.5
billion.
Write to Adria Calatayud at adria.calatayud@dowjones.com
(END) Dow Jones Newswires
March 31, 2020 02:49 ET (06:49 GMT)
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