WPP (WPPGY) posted full year earnings that were largely in-line with analysts' forecasts but cautioned on a difficult year ahead as CEO Martin Sorrell outlined a series of risks facing the world's largest advertising group.
Full-year like-for-like sales rose 3.1%, the company said, while reported top-line revenue hit £14.389 billion ($17.6 billion). The group had a reported net sales margin of 17.4%, up 30 basis points on a like-for-like basis. Earnings for the year were £2.42 billion, up 8% from last year on a constant currency basis. Overall group billings rose 16% last year to £55.245 billion, the group said.
WPP's shares fell more than 5.8% at the open in London to change hands at 1,801 pence each, wiping out all of the stock's year-to-date gains.
WPP said it has gotten off to a "relatively slow start" to the year, with January like-for-like revenue up 1.5% and net sales up 1.2% " against stronger comparatives last year."
"In addition, if you are running a legacy business, you are faced with three simultaneous discombobulating forces," said CEO Martin Sorrell. "Technological disruption from disintermediators, those like Uber or Airbnb in the transportation and hospitality industries; the zero-based budgeting techniques of companies like 3G Capital, Reckitt Benckiser and Coty in consumer package goods and Valeant and Endo in the pharmaceutical industries (although their models have become somewhat discredited); and, finally, the attentions of activist investors such as Nelson Peltz, Bill Ackman or Dan Loeb," Sorrell added.
WPP said it will pay an annual dividend of 56.6 pence per share, up 26.7% from 2015, and that it will meet its objective of a 50% payout ratio one year ahead of schedule.