Its market value has shrunk to \u00a33.9 billion, from a peak of about \u00a324 billion in 2017. Short interest in its shares has shot up to 5.9 per cent, almost doubling in the past month alone, making it one of the most heavily bet against stocks in London.<\/p>\n
When Rose, 60, delivers her first update to the market as chief executive next week she is expected to lay out another slide in the top line. City analysts forecast a 5.5 per cent contraction in organic revenue growth over the third quarter. For the year, a decline of 4.5 per cent is expected, towards the top end of guidance for a 3 to 5 per cent contraction in the top line set out in August, weeks after a bruising profit warning. <\/p>\n
Under the weight of a string of high-profile account losses, a macroeconomic slump that has pushed big brands to cut back on their spending and the existential questions raised by the rise of artificial intelligence<\/a>, the share price trades close to its lowest since the 2008 financial crisis.<\/p>\n \u201cIt\u2019s not quite clear what WPP\u2019s real points of strength or unique selling proposition is,\u201d Adrien de Saint Hilaire, Bank of America\u2019s head of European media research, said.<\/p>\n For many inside and outside group it seems clear that more simplification is needed, in the hope of becoming more nimble in how it services clients and delivering cost-saving benefits<\/a> to the bottom line.<\/p>\n Freeing up enough cash is seen as crucial if WPP is to have the capacity to invest in attracting and retaining talent<\/p>\n REUTERS<\/p>\n The path to focusing WPP, which is centred on three main pillars (media, creative and public relations), had already been set down by Mark Read, Rose\u2019s predecessor, who resigned in June after almost seven years in the job. <\/p>\n He had inherited a sprawling mass of agencies built up from the original Wire and Plastic Products, the Kent-based basket-maker that Sir Martin Sorrell<\/a>, the ad group\u2019s founder, bought 40 years ago. Read is credited with merging agencies and selling businesses seen as non-core, including a 60 per cent stake in Kantar to Bain Capital. The feeling among industry watchers, however, is that he did not go fast or far enough.<\/p>\n \u201cI think the direction of travel has been right \u2026 it\u2019s just probably been a bit slow compared to what\u2019s going on in the wider market,\u201d one big shareholder said.<\/p>\n Selling agencies and shrinking headcount, which numbered just under 96,000 at the end of last year, could also help to raise cash to strengthen the balance sheet. Average adjusted net debt stood at \u00a33.4 billion over the first half of the year, equivalent to almost two times adjusted earnings, above a target range of 1.5 to 1.75 times, as profitability has declined.<\/p>\n \u2022 Cindy Rose has a thorny problem at WPP<\/a><\/p>\n In August the dividend was halved and Rose was to undertake a review of the group\u2019s capital allocation strategy. Some analysts believe, however, that more may need to be done. A capital raise is one option, but unpalatable for some, given the extreme pressure already on the share price.<\/p>\n \u201cGiven the valuation they\u2019re on, the cost of capital implied from doing a raise at this point would be humongous,\u201d the shareholder said.<\/p>\n Freeing up enough cash is seen as crucial if WPP<\/a> is to have the capacity to invest in attracting and retaining talent and faster-growth business lines.<\/p>\n Fundamentally, the company needs to \u201cregain flexibility\u201d, de Saint Hilaire said. \u201cHaving a stretched balance sheet when you\u2019re in the agency business is not good because you can\u2019t do the acquisitions that you may be required to do to diversify and reinvent your business.\u201d<\/p>\n An AI advert for Virgin Voyages features Jennifer Lopez\u2019s digital double, which can be used to send personal invitations<\/p>\n VIRGIN VOYAGES\/VML<\/p>\n Deals are seen as a potentially faster way to adapt in a rapidly evolving market, which is also being forced to respond to the emergence of artificial intelligence, which threatens to complete work faster and more cheaply than human marketers.<\/p>\n Analysts at UBS estimate that Publicis, its French rival, has invested about \u20ac12 billion in buying up faster-growing businesses, including Sapient and Epsilon, its specialist data agencies over the past seven years. Its $4 billion purchase of Epsilon in 2019 has been seen as key to driving the Paris group\u2019s winning streak, helping it to better target advertising to consumers.<\/p>\n \u201cIt certainly gives Publicis a good story to tell in those pitches and that can win the day,\u201d one analyst said.<\/p>\n WPP\u2019s AI pitch has primarily been focused on WPP Open, its AI-driven operating system that it has been building for the past four years. The platform, which is built on the large language models created by the likes of Google and Amazon-backed Anthropic, as well as its own proprietary technology, can spew out all the ingredients needed for the modern ad campaign, including realistic videos, images and audio. It is to spend about \u00a3300 million this year on the platform.<\/p>\n Because the offer has yet to translate to more client wins or make an impression on the top line, however, it has yet to land with investors<\/a>. Rose\u2019s tech nous, a key deciding factor in awarding her the chief executive job after almost a decade spent at Microsoft, could help to convince would-be clients that WPP can harness data and AI to its advantage.<\/p>\n![\"WPP](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/10\/\/866af489-a961-4b20-ad8d-c9f1614c4a64.jpg\")
<\/p>\n![\"AI-generated](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2025\/10\/\/6d71690b-e632-4782-a496-dff1fe01ba28.jpg\")
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