WPP Wpp Plc

   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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