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WPP Group Issues Update On COVID-19 Impact; Withdraws 2020 Guidance

WPP Group plc (WPP.L,WPPGY) reported that, for the first two months of 2020, excluding Greater China, Group LFL revenue less pass-through costs was up 0.4%. For WPP as a whole, LFL revenue less pass-through costs was down 0.6%. WPP Group noted that its March performance was weaker, reflecting spread of virus and government containment actions. The Group has decided to withdraw its guidance for the fiscal year 2020.

The Board of WPP Group has suspended the 2019 final dividend of 37.3 pence per share. The Board has also decided to suspend the 950 million pounds share buyback. These two actions together will preserve approximately 1.1 billion pounds of cash, the Group said.

WPP Group expects its cost reduction measures will generate total in-year savings for 2020 of 700 million pounds to 800 million pounds. The members of the WPP executive committee, as well as the Board, have committed to taking a 20% reduction in their salaries or fees for an initial period of three months. Also, the Group is making a detailed assessment of further actions to reduce cost subject to the impact of the virus.

WPP Group will issue its trading update for the first quarter of 2020 on 29 April 2020.

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