New WPP head Mark Read will consider restructuring
London — Mark Read, tasked with running WPP after the sudden exit of founder Martin Sorrell, said he would look at restructuring the world’s biggest advertising group, but ruled out a break up.
Digital boss Read, appointed joint chief operating officer alongside acquisitions specialist Andrew Scott, said on Monday the company had the tools to respond in an industry facing lower customer spending and technological upheaval.
Quarterly sales were not as bad as feared, boosting WPP shares as much as 9% and easing some of the investor pressure on the owner of ad agencies JWT and Ogilvy & Mather.
Analysts have speculated that WPP could sell its underperforming market research arm Kantar as an initial step to start to unwind the empire built up by Sorrell over more than three decades.
Scott said the group would definitely look at disposing some minority assets it holds.
First-quarter trading figures
Read, who was previously on the board for nine years, was speaking as the group reported first-quarter trading figures.
Organic net sales slipped only 0.1% compared with a 1% drop that analysts had forecast.
The share jump meant the WPP stock was on course for its best single gain and has now regained the losses it incurred when it announced Sorrell’s departure on April 14.
"We … recognise that we need to get the top-line growing more quickly," Read said in an interview. "There are structural shifts in the industry and we need to have more of a structural response, (but) we are an industry in structural change, not structural decline."
WPP, which provides advertising, data and market research to the likes of Ford, Unilever and Vodafone through its 200,000 staff in 112 countries, was rocked this month by the departure of its founder, who launched the company 33 years ago.
Sorrell, who built the company from a two-man outfit in 1985 to dominate the industry, will be a hard act to follow. He never missed a quarterly results session and used them as a platform to discuss everything from advertising trends to geopolitical events. Sorrell, 73, quit after an allegation of personal misconduct. WPP did not give any details of the allegation and Sorrell denied the charges.
Investors, and the board, are likely to assess how Read and Scott deal with the presentation to financial analysts on Monday.
WPP has trailed its peers Omnicom, Publicis and IPG in terms of growth rates in the last year as it was particularly hit by the lower spending from consumer goods groups such as Unilever and P&G.
It has said it does not expect to grow in 2018. Read declined to comment on a report in the Financial Times that said private equity group CVC had approached WPP about a potential sale of Kantar Media, but he said that the division needed to do better.