WPP investors buoyed by Ford contract extension talks

Oliver Gill
Follow Oliver
Martin Sorrell became WPP chief executive in 1986 (Source: Getty)

WPP, the world's largest advertising company, today announced car giant Ford has approached it with a view to agreeing to a contract extension.

In a short announcement, the FTSE 100 firm said Ford had "verbally informed WPP that they are considering their future internal and external marketing model and want to enter into a further agreement with WPP for a period to be agreed in 2018".

Shares in WPP rose are almost two per cent higher in today's trading. But Ford later issued a statement saying that "no decisions have been made", adding: "We are exploring options to improve the fitness of our marketing and advertising operations."

The news will come as a boost to WPP, which has endured a challenging year. Shares have shed almost 30 per cent of their value since the start of 2017.

A smattering of revenue downgrades have been a product of a slowdown in advertising spending by clients. Boss Martin Sorrell said a sluggish advertising market had been hit by an increasingly short-term view taken by activist investors that are hungry to cut costs and maximise cash returns.

Read more: Exclusive: WPP stalling payments as Christmas looms

At the end of last month, WPP said it had lost accounts with AT&T and VW during the third quarter. Meanwhile, big consumer goods clients Unilever and Procter & Gamble had reduced their spend.

Earlier this month City A.M. revealed frontline staff at a major subsidiary of WPP-owned Kantar had been told to hold off paying outstanding invoices until next year in order to maximise the WPP cash position at the end of the year.

Read more: WPP boss Martin Sorrell: Global CEOs are paying shareholders too much

Related articles