The WPP Aunz Ltd (ASX: WPP) share price is surging higher today after the ASX marketing services giant released its full-year FY19 results as well as an overview of its new strategy.
Achieving guidance in a challenging environment
WPP recorded financials and earnings in line with previous guidance amid very challenging market conditions. For the full-year to 31 December 2019, WPP reported total net sales of $819.4 million, which was a decline of 4.4% on the prior year.
Despite the subdued results, this didn't put off investors with the WPP share price up by 7.83% at the time of writing.
The group's continuing business net sales came in at $712.5 million, a decline of 2.6%, while total headline earnings per share (EPS) was 7.4 cents, down quite significantly by 9.6% on the prior year. Continuing business headline EPS was 6.0 cents, also down by 9.6% on the previous year.
Pleasingly for shareholders, WPP reported a strong cashflow conversion rate of 98% over the last 2 years of operation and the company managed to significantly reduce net debt.
New corporate strategy announced
WPP also reported it has already commenced the transformation phase of its strategy. This includes a new leadership strategy, restructuring of its New Zealand operations and the establishment of a Centre of Excellence to consolidate the technology consulting operations of the group.
In announcing the group's new group strategy, Jens Monsees, Managing Director and CEO, said:
"This year is the transformation phase of our strategy. Now two months into 2020, I can say we have already made meaningful progress in this phase by announcing a new leadership structure, a restructuring of our New Zealand business, added capabilities in technology through the acquisition of Dominion in New Zealand and announcing the establishment of our Centre of Excellence to consolidate the technology consulting operations of the Group."
The CEO further added, "Our path to growth will be undertaken in three phases – transform, strengthen, and grow – over a three-year period to 2022."
Dividends and outlook for remainder of 2020
WPP declared a fully franked final ordinary dividend of 2.9 cents per share, bringing the total ordinary dividend for FY19 to 5.2 cents per share. This represents a payout ratio of 70% of the headline EPS of 7.4 cents per share.
The company also announced a fully franked special dividend of 1.5 cents per share to be paid for the next four dividends. As such, WPP's total dividends for the 2019 year comes to 6.7 cents per share, fully franked, an increase of 6% on the prior year.
Due to the considerable transformation process that will be undertaken in the FY20, the company noted that it will delay the release of its guidance on the 2020 outlook. Instead, WPP will provide this at its AGM in May 2020.
WPP further noted that it is also too early to predict its full-year result considering the uncertain economic environment which its clients now face.
