LONDON (dpa-AFX) - British communications services provider WPP Group Plc (WPP.L, WPPGY) reported that its operating profit for the first-half of 2024 rose 38.2% to 423 million pounds from last year's 306 million pounds. The company updated 2024 guidance. WPP agreed to sell its majority stake in FGS Global to KKR at an enterprise valuation of $1.7 billion, generating total cash proceeds to WPP of 604 million pounds after tax.
Earnings per share for the first-half of 2024 was 18.8 pence, an increase of 82.5% from the prior year, due to higher reported operating profit.
Headline earnings per share was 30.9 pence, a decrease of 6.6% from the prior year, due to lower headline operating profit, higher headline net finance costs and a higher headline effective tax rate.
Reported revenue for the first half of 2024 was up by 0.1% to 7.23 billion pounds, with like-for-like revenue growth of 2.6%.
The company updated 2024 guidance. Like-for-like revenue, excluding pass-through costs, is now expected to be between -1% and 0%. Previously it was expected to be 0% to 1%. The headline operating profit margin is anticipated to improve by 20 to 40 basis points, excluding the impact of foreign exchange.
Over the medium term, the company continues to expect 3 percent LFL growth in revenue less pass-through costs, and 16 percent to 17 percent headline operating profit margin.
For 2024, the Board declared an interim dividend of 15.0 pence per share, unchanged from the prior year. The record date for the interim dividend is 11 October 2024, and the dividend will be payable on 1 November 2024.
In a separate press release, WPP said it has entered into an agreement to sell its entire majority stake in leading strategic communications and advisory firm, FGS Global, to Kite Bidco Inc., an entity controlled by investment funds managed or advised by Kohlberg Kravis Roberts & Co. L.P. ('KKR'). KKR first made a minority investment in the Firm in July 2023.
The consideration for the sale of WPP's about 50% stake at an Enterprise Value of $1.7 billion or 1.3 billion pounds is $707 million or 557 million pounds after tax payable in cash at completion. The total cash proceeds payable on completion of $767 million or 604 million pounds will be used to reduce WPP's leverage.
The Transaction is expected to close before the end of 2024.
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