WPP hikes dividend as profits rise

Full-year reported revenue for 2022 rose 12.7% to £14.4bn, with like-for-like revenues up 6.7%. Headline pre-tax profit increased to £1.6bn from £1.4bn a year earlier.

WPP lifted its final dividend by 30.5% to 24.4p a share.

The company hailed LFL revenue growth across all of its major creative, media, public relations and specialist agencies. It said client demand was strong, particularly for commerce services and in commerce media.

The group noted "healthy" growth in most major markets, with advertising spend in the US and UK up 7.1% and 8.9% respectively. China was the only major market to see declines in advertising spend in 2022 as lockdown restrictions impacted consumer spending.

For 2023, WPP expects LFL revenue growth of between 3% and 5%, ahead of market views.

Chief executive Mark Read said: "WPP delivered strong growth in 2022, despite the macro challenges, reflecting the priority placed by our clients on investing in communications, customer experience, commerce, data and technology.

"We enter 2023 in a strong financial position with good momentum from new business and the many opportunities ahead of us. While there will no doubt be challenges, the continued need for major companies to build brands, sell products, reinvent and transform their business, understand their data, invest in technology and exploit the potential of AI remains, as does their need for modern partners who can help them navigate this new world."

At 1000 GMT, the shares were up 4.2% at 1,059.28p.

Russ Mould, investment director at AJ Bell, said: "The company is proving successful at reducing costs and any concern about the size of its debt pile is assuaged by an eye-catching increase in the dividend.

"While Mark Read is unlikely to receive too many garlands for his performance, given the shares are lower than when he started as CEO in 2018, he does deserve credit for stabilising the business in the wake of founder Martin Sorrell’s acrimonious departure and seeing it through the pandemic and a continuing structural shift in the advertising market.

"If he can get WPP to deliver robust performance when the backdrop is challenged, he will hope to impress when economic conditions move more in its favour."