Marketing and Communication group WPP Scangroup PLC has issued a profit warning for the financial year ending 31st December 2023.
The marketing firm has warned its profit will shrink by at least 25 per cent compared to what it posted for the fiscal period ended 31st December 2022.
WPP Scangroup has attributed the expected dip in earnings to a subdued economic environment in the market which has led to cautious spending by its clients on advertising, marketing and communication.
“Further, the Company undertook a comprehensive restructuring program to right-size the cost base and reshape the staff structure, to better
deliver against current and future client needs. This led to a one-off severance cost of Kshs 178 million included in operating and administrative expenses,” stated WPP Scangroup Company Secretary Winniefred Jumba.
“Directors continue to optimize and transform the business operations in order to deliver future competitiveness and value,” added Jumba.
WPP Scangroup joins other listed firms like Crown Paints, Sasini, Nation Media Group (NMG) and Car & General that have issued profit warnings for the financial period ending December 31st.
Read: Crown Paints Issues Profit Warning On Increased Costs, Weaker Shilling
Crown Paints Kenya has warned its profit for the year ending December 31st 2023 will shrink by more than 25 per cent compared to the previous year due to the increased cost of raw materials, increase in transportation costs and volatility in foreign exchange rates.
Sasini PLC profits for the financial year are expected to shrink by at least 25 per cent occasioned by the high cost of production due to the unplanned escalation of input costs.
Similarly, Car & General’s profit for the fiscal year will also drop by more than 25 per cent due to the weakening of the Kenya Shilling against the US dollar while NMG’s profit will also sink by at least 25 per cent on higher taxes and surge in the price of newsprint.
Read: Patricia Ithau Appointed WPP Scangroup CEO
For the fiscal year period ended December 31st 2022, WPP Scangroup PLC posted a 297 per cent jump in profit to Ksh75 million from the Ksh38 million loss registered in 2021.