Marketing and Communication group WPP Scangroup PLC has bounced back to profitability, posting Ksh130.1 million profit for the year ended 31st December 2023.
This is from the Ksh145.5 million lost it posted in a similar period the previous year.
This was mainly driven by capital gains related to a deferred purchase consideration for the sale of Kantar which was previously held for legal contingencies.
Revenue for the trading period shrunk 9.6 per cent to Ksh6.6 billion from Ksh7.7 billion a year prior.
“We have built a strong technology stack to support innovation-led growth for our agencies. The next stage of transforming our business is focused on continuing to invest in technology and talent, leveraging the gig economy and Artificial Intelligence (AI) for agility and developing net-zero targets in line with our sustainability agenda,” said WPP Scangroup Chief Executive Officer (CEO) Patricia Ithau.
Gross profit for the year recorded a 1.4 per cent jump, increasing by Ksh29.7 million to Ksh2.2 billion from Ksh2.1 billion a year earlier buoyed by organic growth from existing clients and new clients wins.
Operating and administrative expenses soared to Ksh2.6 billion, a Ksh143 million up from Ksh2.5 billion registered in a similar period the previous year on the back of one-off severance costs for a comprehensive restructuring programme undertaken to right-size the cost base and reshape the staff structure, to better deliver against current and future client needs.
The directors of the listed firm did not declare a dividend for the year as WPP Scangroup expects modest growth in 2024 as it works through losses incurred in Scanad.
“The impact of these losses will be tapered by growth in technology-backed products and expected organic growth from both Ogilvy, GroupM and H&K Kenya.”
The firm’s total assets for the period dropped to ksh8 billion from Ksh8.1 billion a year earlier.
“At the date of approving these financial statements and after the end of the reporting period, the directors are aware of a case filed by Bharat Thakrar, former CEO, former director, and a current shareholder of the company against the company. Service was effected on 23 April 2024,” noted WPP Scangroup in its financial results.
“The company is in the process of perusing the court pleadings to enter an appearance and prepare a suitable defence. The company cannot comment any further as the matter is the subject of an active litigation in court,” it added.
Read: WPP Scangroup Issues Profit Warning On Subdued Economic Environment