(Bloomberg) -- Advertising giant WPP Plc suspended its dividend and a share buyback as it withdrew its guidance for 2020, citing “significant uncertainty” over the outlook.
“As we enter the second quarter, it is clear that the impact of COVID-19 on the business will increase but it is not possible at this stage to quantify the depth or duration of the impact,” WPP said in a statement.
Shares of WPP increased as much as 1.8% in morning trading in London Tuesday.
Chief Executive Officer Mark Read has been struggling to stabilize the London-based company after major clients pulled business from its global network of agencies. In February, WPP had forecast a fourth year with no sales growth.
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There were signs that Read's turnaround efforts were gaining traction before the virus sent western economies into a tailspin. For the first two months of 2020, excluding greater China, group like-for-like revenue less pass-through costs grew 0.4%, the company said.
At the end of last year, WPP had 3 billion pounds ($3.7 billion) in cash and total liquidity, including undrawn credit facilities, of 4.8 billion pounds. The company had announced a 950 million-pound share buyback, and completed 330 million of that since December.
Along with the suspension of the 2019 final dividend of 37.3 pence per share, the actions announced Tuesday mean the company will be preserving about 1.1 billion pounds, it said.
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