Ad giant WPP has seen profits drop sharply as it continues to restructure the business following former boss Sir Martin Sorrell’s abrupt exit last year.
Sir Martin quit after allegations of personal misconduct, which he denied.
Pre-tax profits at the firm fell almost a third last year to £1.46bn, a drop it blamed largely on restructuring costs.
WPP also reiterated 2019 would be “challenging, particularly in the first half” as client losses from last year continues to weigh on the business.
Despite the profit fall, the firm’s performance was at the upper end of the guidance it provided last year, helping to boost its shares 9% in early trading.
Liberum analyst Ian Whittaker said last year’s results were “slightly better than expected”, but said the firm’s commentary on 2019 was also more positive than expected.
New boss Mark Read said the firm was at the start of a “three-year turnaround plan”.
“It’s early days in what we need to do but I would say the initial signs are promising,” he told Reuters.
Mr Read picked its controversial Gillette ad campaign as one of the firm’s highlights for last year.
The ad, called Believe, played on the razor firm’s famous slogan “The best a man can get”, replacing it with “The best men can be”.
While some praised the message of the advert, it also came in for criticism, with some customers threatening to boycott the brand.
Mr Read said the ad demonstrated “the global impact of what we do”.
WPP – which owns major agencies such as Ogilvy and JWT – has been selling off assets to raise money. It said it had sold 36 divisions since last April, helping to strengthen its balance sheet.
Founded as a holding company in 1986, WPP’s operations today span creative agencies, public relations, consultancy and data analytics.
However, it has been struggling over the past few years amid mounting competition from tech platforms Facebook and Google as more advertising moves online.
Traditional consultancies such as Deloitte are also entering the market while major clients such as Unilever are spending less on advertising.
Sir Martin built WPP from a small engineering company to create the world’s biggest ad agency.
He has since formed rival venture S4 Capital and in July outbid his former company to buy the Dutch digital production company MediaMonks.