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WPP H1 Headline Profit Declines; LFL Revenue Less Pass-through Costs Down 2.0%

WPP Group plc (WPP.L,WPPGY) said its first-half reported profit before tax declined 44% driven primarily by a significant prior year first half exceptional gain that has not been repeated and a charge on the revaluation of financial instruments versus a credit in 2018. The company reiterated its 2019 guidance.

For the first-half, reported profit before tax was 478 million pounds compared to 846 million pounds, prior year. Reported earnings per share was 24.8 pence compared to 53.4 pence. Headline profit before tax was down 17.6% to 605 million pounds from 735 million pounds, last year, and down 18.4% in constant currency. Headline earnings per share was 34.2 pence compared to 42.6 pence. Headline operating margin was 11.9%, down 1.2 margin points like-for-like, for the period.

First-half reported revenue was up 1.6% at 7.6 billion pounds. Revenue on a constant currency basis was flat compared with last year. Like-for-like revenue less pass-through costs were down 2.0%, for the period. Reported billings were down 0.5% at 26.5 billion pounds, and down 2.0% in constant currency.

For 2019, the Group continues to project: like-for-like revenue less pass-through costs down 1.5% to 2.0%; and headline operating margin to revenue less pass-through costs down around 1.0 margin point on a constant currency basis.

The Board declared an interim dividend of 22.7 pence per share, the same as last year. The record date for the interim dividend is 4 October 2019, payable on 4 November 2019.

Also, WPP appointed Jasmine Whitbread to its Board as a non-executive director, effective from 1 September 2019. She is currently Chief Executive of London First and a non-executive director of Standard Chartered plc and BT Group plc.

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