LONDON: WPP, the world’s largest advertising group, cut its full-year sales target on Wednesday after consumer goods giants slashed their spending, forcing it to miss half-year targets and sending its shares tumbling.
Led by the high profile businessman Martin Sorrell, WPP said it had been hit in June and July as the likes of Unilever, Nestle and others cut their spending, while demand in the United States deteriorated further, in line with peers.
As a result, the London-based group reported first-half like-for-like net sales down 0.5 percent, below a consensus of 0.7 percent growth. It cut its full-year underlying net sales target to between 0 and 1 percent growth, from a previous forecast of 2 percent growth.
Its shares fell 12 percent in early trading.
“July was weak, June was tough,” Sorrell told Reuters.
“The weakest part was the US (and in terms of categories), we have activist investors in consumer goods groups putting pressure on companies to perform.”
Despite the slowdown in the top line, tight cost controls helped the group to reiterate its target for a 0.3 point improvement in its operating margin.
“All regions, except the United Kingdom, Latin America and Central and Eastern Europe showed lower revenue than the prior year and all sectors were down,” it said.
WPP rattled investors in March when it cut its 2017 sales forecast, citing an ultra competitive environment in which rivals were having to scrap for every dollar of ad spend.
From 3.1 percent net sales growth in 2016, WPP had set a 2017 target of 2 percent to reflect “tepid” economic growth and weaker net new business trends, before it cut it again on Wednesday.
The group has seen a particular slowdown in the US, in line with the other major ad groups, where underlying net sales fell by 2.2 percent in the first half of the year.
Consumer goods group have also been on a quest to cut costs as growth has slowed, with activist investors and a failed takeover attempt at client Unilever shaking up the industry and forcing companies to rethink how they spend.
WPP said a cyberattack in June had not affected revenue or its data and could not be blamed for the slowdown.
— REUTERS
WPP cuts sales forecast on weak consumer goods demand
WPP cuts sales forecast on weak consumer goods demand
Taiba Investments profit rises 9% on stronger pilgrim-driven revenue
RIYADH: Saudi Arabia’s Taiba Investments Co. reported a 9.32 percent rise in annual profit to SR364.8 million ($97.20 million) as higher pilgrim flows lifted revenue to SR1.36 billion, a filing on Tadawul showed.
Net profit attributable to shareholders increased from SR333.7 million a year earlier, with earnings per share climbing to SR1.40 from SR1.28. Revenue rose 3.7 percent to SR1.36 billion in the year ended Dec. 31, compared with SR1.32 billion in 2024.
Taiba, a hospitality and real estate developer backed by the Kingdom’s sovereign wealth fund, Public Investment Fund, focuses on hotel and property assets primarily in the holy cities of Makkah and Madinah.
In a Tadawul filing, the company stated: “This growth was primarily driven by improved performance across the company’s segments in Makkah and Madinah, supported by higher numbers of visitors and Umrah pilgrims, the commencement of operations of new facilities, and increased revenues from the real estate segment.”
Taiba Investments reported that the SR31.1 million rise in net profit was mainly attributable to improved operating performance, the reversal of a litigation provision previously recognized in 2023 following the termination of a contractual relationship with one of the operators after a settlement between the parties, and capital gains realized from the expropriation of one of its properties in Madinah.
Total comprehensive income attributable to shareholders declined 55.53 percent to SR198.2 million from SR445.7 million.
Other comprehensive income recorded a loss of SR166.6 million, compared with a gain of SR111.9 million in the previous year, primarily due to a decline in the fair value of financial derivatives used for hedging and a decrease in the market value of certain investments measured at fair value through other comprehensive income.
Shareholders’ equity increased marginally by 0.04 percent to SR6.85 billion. Taiba's share price saw a 3.03 percent increase to SR34 by 10:20 am Saudi time.
