WPP – Return Of Marketing Spending Boosts Media Giant

Published on

WPP PLC (LON:WPP)’s net revenue rose 6.9% to £11.8bn on a like-for-like (LFL) basis, which excludes the impact of acquisitions and exchange rates. Growth was helped by a return to more normal global marketing spending.

This includes an increase in TV advertising towards pre-pandemic levels. There was LFL growth in all regions, including a 6.6% increase in WPP’s biggest region, North America. Underlying operating profit was £1.7bn, up from £1.5bn and in-line with expectations.

Get The Full Henry Singleton Series in PDF

Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q4 2022 hedge fund letters, conferences and more


The group’s on track to unlock £600m of annual cost savings by 2025, with savings-to-date of £375m better than expected. WPP spent £237m on acquisitions, which included on  an influencer marketing agency and reflected efforts to expand in faster-growing regions.

Underlying net debt of £2.5bn was up from £900m, with the increase due to higher investments and shareholder returns.  A final dividend of 24.4p was announced.  

Looking ahead, WPP expects LFL net revenue growth of 3-5% for 2023.

The shares rose 4.0% following the announcement.

WPP's Earnings

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown

“WPP is a titan of industry. Its sheer size means gaining momentum and getting into shape is a huge challenge, but it’s one the company has risen to. The largest concern for investors was how successful WPP will be in realising its cost efficiencies, with £600m due to be found by 2025. The fact this target remains in focus and on track is a genuine relief.


As a media giant, WPP has been stung by a global slowdown in marketing spending brought on my enormous geopolitical and economic stress. By all accounts this looks to be reversing, which has fed into strong growth at the end of the year. To top it off, momentum hasn’t only been achieved, it’s being harnessed, and revenue growth of 3 -5% is expected this year.

The debt pile is now a little more cushioned than is ideal, but should recent progress continue, bringing it back down should be an easy task. Investors have been well-rewarded in the form of a hefty share buyback programme, which will go some way to diluting concerns over an over-laden balance sheet.”