WPP shakes off macro concerns with robust top-line growth

WPP have confirmed a third consecutive year of like-for-like sale growth as their transformation strategy begins to purr.

Despite a deteriorating macroeconomic backdrop, WPP revenue for 2022 grew 6.7% on a like-for-like basis and 12.7% on a reported basis. Operating profit jumped 10.5% £1.35bn on a reported basis.

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WPP’s sales growth was driven by net new business of $5.9bn in 2022 with new mandates from the likes of Audible, SC Johnson, and Verizon.

Having been deeply entrenched in traditional media formats, WPP had initially struggled to adapt to the emergence of social media but it no is one their main sources of growth.

“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,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“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.”

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WPP shares were 4% higher at 1,061p at the time of writing.

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