FTSE 100 Giants has just lost £2.17bn, an update in strategy is needed
Last updated on December 3rd, 2018
WPP, which is one of the 100 companies listed on London Stock Exchange with the highest market capitalization, has just lost £2.17bn of its stock market. FTSE 100 giants have got a profit warning with falling steeply by 17 percent. This plunging happened because of the incident that happened to Sir Martin Sorrel after he has been accused of misusing the company funds. But will Mr. Mark Read the new Chief Executive get WPP to the shore safely?
The advertising company located in the UK was having a bad quarter and expected to continue on that track for the rest of the year as the sales for the full year were going down the expectations. Even the most pessimist analytics would have never thought that WPP will go this deep into troubles after the incident.
Decisive actions and strategic thinking is required
Everyone in WPP including the Chief Executive Mark Read thinks and believes that the company is in a place where decisive actions have to be taken to overcome what has already started to happen. This drop needs actions from top levels before any other disaster, shares have already been fled among its traders which caused a 17 percent drop – a bad indicator for the traders.
Mr. Mark Read said that WPP will start testing strategic options for its market-research unit Kantar in order to increase cash, Kantar is a unit with a lot of potentials and they believe so much in WPP but to put this faith and believe in its place and to unlock this potential they think that the best option for Kantar is with a financial or strategic Partner.
Mr. Read is in the Hot Seat
After the departure of WPP founder Sir Martin, all eyes are directed at Mr. Mark Read as all the gauges are going in a wrong way at this time of the year, WPP stated that sales fell 1.5 percent in the last three months up to September, and this is even worse than the city analytics expected. Also, the overall revenue decreased by 0.8 percent to £3.76billion in the last quarter and of course, this will result in falling of the net sales over the year. The fall that is expected to happen for net sales is between 0.5 percent and 1 percent, which is, surely catastrophic for the FTSE 100 giants, WPP.
All these incidents were expected to happen in one way or another after Sir Martin, who founded this company more than 30 years ago, accused of personal misconduct. His leaving remains stuck in the debate, with WPP performing an inquiry into claiming that he misused company funds, but further details of that investigation remain unclear.
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