WPP plans to cut PS500 million a year, slashes dividend after slump

WPP PLC on Thursday unveiled a multi-year strategic overhaul aimed at simplifying the group and restoring organic growth, as it reported a fall in earnings for 2025 and cut its dividend.

The London-based advertising and marketing services group said its new plan, branded ‘Elevate28’, will transition WPP from a holding company structure into a ‘single company’ streamlined into four operating units – WPP Media, WPP Creative, WPP Production and WPP Enterprise Solutions – operating across four regions: North America, Latin America, Europe, Middle East & Africa, and Asia Pacific.

Chief Executive Officer Cindy Rose, who has led WPP for six months, said the strategy is designed to address underperformance ‘driven by excessive organisational complexity, a lack of an integrated operating model and inconsistent strategic execution’.

Shares in WPP were down 6.1% at 255.70 pence in London on Thursday morning. The stock has slumped 67% over the past 12 months, shedding substantial market value and leading to its relegation from the FTSE 100 after nearly 30 years in December. WPP’s market capitalisation has fallen from around £24 billion in 2017 to about £2.76 billion currently.

Alongside the strategy update, WPP reported 2025 results that underscored the group’s recent underperformance.

Revenue stood at £13.55 billion, down 8.1% from £14.74 billion a year earlier. Revenue less pass-through costs, a key metric for the group, fell 10% to £10.18 billion and was down 5.4% like-for-like.

Headline operating profit fell 23% to £1.32 billion from £1.71 billion, with the headline operating profit margin slipping to 13.0% from 15.0%.

WPP said the margin decline reflected lower revenue less pass-through costs and higher severance costs, particularly at WPP Media, partly offset by lower staff incentives.

Reported operating profit dropped 71% to £382 million from £1.33 billion, including goodwill impairment charges of £641 million and property impairments of £114 million.

Headline diluted earnings per share fell 28% to 63.2p from 88.3p, while reported diluted EPS swung to a loss of 20.0p from earnings of 49.4p.

The group is targeting a return to organic growth during 2027, and said it aims to become a simpler, lower-cost, ‘AI-enabled’ business with improved margins and cash conversion thereafter.

As part of the transformation, WPP expects to deliver £500 million of gross annualised cost savings by 2028, with total cash costs of around £400 million phased over two years.

WPP said it will reinvest much of the savings into higher-growth areas, while continuing to fund WPP Open.

WPP Open is the group’s ‘agentic marketing’ platform, built around its Open Intelligence data layer using InfoSum technology. WPP said the platform will link its operating units and underpin deeper technology and data partnerships.

WPP has proposed a final dividend of 7.5p per share, bringing the full-year dividend to 15.0p, down sharply from 39.4p a year earlier.

WPP said the reduction balances shareholder returns with investment for growth, and added the board intends to maintain the annual dividend at 15.0p per share in 2026.

For 2026, WPP expects like-for-like revenue less pass-through costs to decline in the mid to high single digits in the first half, with an improving trajectory in the second half.

It forecasts a headline operating margin of 12% to 13%, and adjusted operating cash flow before working capital of £800 million to £900 million, including restructuring costs.

Coinciding with the release of its annual earnings, WPP disclosed share purchases by its chair and chief executive officer.

Chair Philip Jansen bought 50,000 shares at £2.55 each on Thursday for a total of £127,535. CEO Rose likewise purchased 50,000 shares on the same day, paying £2.69 per share for a total of £134,557.60.

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