WPP PLC: Strong Profit Margin Growth Expected

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WPP PLC, the London-based advertising and marketing company, has raised its medium-term operating profit margin guidance and expressed confidence in meeting full-year results.

Upgraded Profit Margins

WPP now anticipates a medium-term headline operating profit margin of 16.0%-17.0%, surpassing previous guidance of 15.5%-16.0% set in 2020.

Revenue Growth Projections

The company has also revised its projections for revenue growth, expecting more than 3% growth in revenue less pass-through costs over the medium-term, compared to prior guidance of 3%-4%.

Outlook for 2023

WPP remains optimistic about its performance in 2023, expecting growth in like-for-like revenue less pass-through costs of 0.9%, outperforming previous guidance of 0.5%-1.0%. The forecasted headline operating profit margin for 2023 is 14.8%, or 15.0% on a constant currency basis.

Future Prospects

Looking ahead to 2024, WPP predicts a growth range of 0%-1% in like-for-like revenue less pass-through costs. Additionally, the company aims to achieve a headline operating profit margin improvement of 20-40 basis points, excluding foreign exchange effects.

Strategic Approach

WPP emphasizes its disciplined approach to capital allocation as the foundation of its future business strategy. This approach includes continued organic investment, a progress dividend policy, and a thoughtful approach to mergers and acquisitions.

The Chief Executive, Mark Read, expressed confidence in the company’s ability to navigate challenging market conditions and accelerate growth over the medium-term.

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