By Adria Calatayud

WPP PLC (WPP.LN) reported results for 2018 on Friday. Here's what you need to know:

LIKE-FOR-LIKE SALES: The London-based advertising group, whose agencies include Ogilvy & Mather, Grey and Group M, said like-for-like net sales--a closely-watched metric for the company's underlying performance--fell 0.7% in the fourth quarter, beating analysts' expectations of a 1.5% decline. For 2018 as a whole, like-for-like net sales fell 0.4%. This compares with a 0.9% decline in 2017 and forecasts of a 0.6% fall, according to a consensus provided by WPP.

HEADLINE PRETAX PROFIT: WPP made a headline pretax profit of 1.86 billion pounds ($2.48 billion), down 11% on year but in line with a company-provided consensus. Net profit dropped 42% to GBP1.06 billion, hit by restructuring costs and a goodwill impairment.

WHAT WE WATCHED:

-OUTLOOK: WPP said it faces a challenging year, particularly in the first half, and forecast like-for-like net sales to fall by 1.5% to 2.0% in 2019 due to client losses last year. The company's guidance struck analysts at investment bank Liberum as more positive than expected, they said in a research note. Analysts at Citi and Barclays called the results reassuring. Shares in WPP were the FTSE 100's top riser and traded 7.1% higher at 884.20 pence at 1240 GMT.

-TURNAROUND: WPP Chief Executive Mark Read said the company has made initial progress in implementing its new strategy. Since he took the helm of the company in September, WPP has tried to simplify its structure and increase investments in creativity and technology. It is targeting to grow in line with peers by the end of 2021. "The plans that the company outlined at the capital markets day in December seem more than achievable," said analysts at Liberum.

-NORTH AMERICA ISSUES: WPP's priority in the year ahead will be to address its recent weak performance in North America, its CEO said. In the fourth quarter, North America was the laggard for WPP with a 5.7% drop in like-for-like sales compared with a 5.4% fall in the previous quarter.

Write to Adria Calatayud at adria.calatayudvaello@dowjones.com

(END) Dow Jones Newswires

March 01, 2019 08:16 ET (13:16 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
WPP (NYSE:WPP)
Historical Stock Chart
From Jun 2024 to Jul 2024 Click Here for more WPP Charts.
WPP (NYSE:WPP)
Historical Stock Chart
From Jul 2023 to Jul 2024 Click Here for more WPP Charts.