WPP shares dive amid business slowdown and staff travel restrictions | Media


WPP’s share price plunged after reporting a slowdown in business as the advertising giant implements staff travel restrictions to Asia Pacific and Italy and self-quarantine measures to tackle the coronavirus threat.

Shares in the marketing services giant fell as much as 17% in early trading as investors reacted to a deterioration in trading in the final three months of the year. WPP reported a 1.9% fall in net sales in the fourth quarter, its worst of the year, which analysts at Citi called “flat out disappointing”.

WPP has instituted a ban on travel to China, Hong Kong, Singapore, South Korea and Japan. It has an “essential business travel” only within the rest of the Asia Pacific and, most recently, Italy.

In addition, WPP has introduced a self-quarantine policy with anyone returning from China, Hong Kong, Singapore, South Korea, Japan, Iran or “specific lockdown areas” in Northern Italy must work remotely for 14 days from the date of return.

China, the world’s second largest advertising market after the US, accounts for 5% of WPP’s £10.8bn net sales.

Investors were further disappointed by WPP’s forecast of flat growth this year, which the company pointed out did not include factoring in any impact from the coronavirus outbreak. “At this stage, it is too early to predict the full potential impact,” the company said. “We will provide an update at our first quarter trading update.”

Mark Read, WPP’s chief executive, said the company had introduced measures to try to limit the impact on the company’s operations and protect its 106,000 global workforce.

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Read said that a “single digit” number of its 5,000 staff in China had contracted the virusand all were “recovering well”.

“It has impacted our staff in China,” he said. “They have been working from home since the Chinese New Year and have started to partially come back to work this week in line with other companies in China,” he said. “If, or when, the coronavirus impacts the global economy it will no doubt impact WPP.”



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