LONDON (dpa-AFX) - WPP Plc (WPP.L, WPPGY) said it expects to return to 2019 levels of revenue less pass-through costs by 2022. The company projects double-digit headline earnings per share growth over the next three years.
The company aims to achieve annual gross savings of around 600 million pounds by 2025 by simplifying operating model, generating efficiencies in procurement and real estate. The savings include the 200 million pounds permanent savings previously highlighted, which are part of the 2020 cost reduction in response to the COVID-19 pandemic.
For 2021, the company expects mid-single-digits percentage LFL growth in revenue less pass-through costs, and a headline operating margin of 13.5-14.0%.
From 2023, the company targets annual revenue less pass-through costs growth of 3-4%, including an annual benefit from M&A of around 0.5-1.0%.
LFL revenue less pass-through costs growth of negative 6.7% across the October and November, taking the year-to-date performance to negative 8.4%.
The company expects full-year 2020 LFL revenue less pass-through costs to be in line with the 11-month figure. Headline operating profit margin is expected to be 12.5-13.0%, reflecting a very strong performance on cost reduction.
Capex will rise to 450 million pounds - 500 million pounds in 2021 and 2022, reflecting the peak of campus and IT investments but also in part reflecting the postponement of some 2020 spend. After 2022, the company expects capex to return to a more normalised range of 300 million pounds -350 million pounds per annum.
In a separate press release, WPP said it has submitted a revised proposal to acquire the remaining shares in WPP AUNZ it does not currently own. Meanwhile, WPP AUNZ has accepted the revised proposal of A$0.70 per share from WPP.
The total aggregate consideration payable by WPP for the remaining shares would be approximately A$230 million.
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