WPP (WPP) counts the cost of ripping up Sir Martin Sorrell empire. The cost of unravelling the sprawling advertising empire built by Sir Martin Sorrell was laid bare on Friday, when WPP profits slumped 30% and the company warned of more pain to come. Mark Read, Sorrell’s replacement, said the group sold 36 businesses in the past year, raising cash of £849 million with more disposals on the way. Client losses have been stemmed but 2019 “will be challenging” due to headwinds from clients departing last year. WPP was able to boast of creative successes including Gillette’s The Best Men Can Be campaign, which became a global controversy. Profit slumped to £1.4 billion due to the overhaul. The departure of clients, including parts of Ford, pushed revenues down 2.6% to £12.8 billion. Read said the Gillette campaign, while “not uncontroversial”, was a testament to the quality of WPP’s creative work and a sign of “the global impact of what we do”.
London Stock Exchange profits top £1 billion for the first time, shrugs off Brexit threat. Annual profits at the London Stock Exchange Group (LSE) passed £1 billion for the first time today, as the new American chief executive shrugged off the threat from Brexit. David Schwimmer, a former Goldman Sachs man who arrived last April, said London was holding its position as the chief financial centre in Europe and clients remained steadfast. He said: “The group is well positioned to adapt to any outcome, including a no-deal Brexit.” He is plotting 250 job cuts at the LSE, around 5% of staff, but declined to give details. They will come across the world as part of cost savings that will see the LSE reduce its number of offices in New York from five to one. In 2018 revenue was up 8% to £1.9 billion, and the dividend jumped 17% to 60.4p. Profits excluding writedowns rose 17% to £1.06 billion. Operating profit rose 15% to £931 million.
Vertu Motors (VTU) warns on new vehicle sales with Brexit just around the corner. The car dealer has warned new vehicle sales were down with Brexit just around the corner. It said over the past year it has sold 2.37 million new cars, a decline of 6.8% on 2017 and the second year of decline from the 2016 peak of 2.69 million. Full results out in May.
Rightmove (RMV) – Slowing profit growth and a decline in the number of estate agents listing showed its days could be numbered as the go-to property porn website. The firm reported its slowest full-year profit growth in nine years, despite rising 10% to £203 million, and the total number of agents listing fell 2% to 17,328. Analysts were quick to question whether Rightmove’s smaller competitors had now caught up. Peel Hunt analyst Jessica Pok said: “We believe the competitive environment is getting tougher as OnTheMarket continues to add to the number of agencies listing on their site, while Zoopla focuses on making the customer experience better.” She added that slowing profit growth reflected how badly the property market has been damaged by Brexit: overall housing transactions fell 3% last year. A growing sense of unease around the firm was compounded by chairman Scott Forbes who said that after a “significant minority” of shareholders opposed his re-election as chairman at the annual meeting in May, he would resign May next year. Investors disapprove of his having so many other jobs: he is chairman at research giant Ascential, renewable energy business Innaol Group, and US car-selling website Cars.com.
Fastjet (FJET) the cash-strapped low-cost African airline said it had managed to extend the terms of a loan to March 31. Fastjet in June had entered agreements with Annunaki Investments and SSCG Africa Holdings, following which the airline lent $5 million from its Zimbabwe unit to Annunaki in return for a $2 million loan to Fastjet from SSCG. The low-cost airline said that the loan amount from Fastjet Zimbabwe to Annunaki had increased from $5 million to $7 million.
Revolution Bars suffers as punters go dry for January. Brits going sober for dry January hammered sales at Revolution Bars Group (RBG), the cocktails specialist said on Friday as it warned on profits. Boss Rob Pitcher said it was the driest January the operator of 79 bars had ever seen. Comparable sales in the eight weeks to February 23 slumped 7.3%. The update came as Revolution Bars posted results for the first half to December 29. It had strong Christmas trading but suffered earlier in the period as customers shunned bars to enjoy the sunshine and football World Cup. Comparable sales decreased 4%. Full-year profits will be between £11 million and £12 million. The previous guidance was for £12 million.
