WPP AUNZ informs the stock market on its response to COVID-19

WPP AUNZ has informed the ASX on its business operations and proactive actions the grouop is taking in response to the unprecedented economic, logistical and market challenges its facing in dealing with the COVID-19 pandemic.

WPP ANZ informed the market of the following:

The immediate actions we are taking and the strategies that are being developed and implemented across the business, include:

On Tuesday last week we took the very difficult but pre-emptive and prudent decision to cancel the previously announced 2019 final and special dividend. It is our intention that we will resume our ordinary dividend policy and our plans to return excess cash through special dividends, as soon as we have appropriate clarity as to the impact and duration of the crisis.

Many of our clients have already reduced their marketing and communications expenditure and more may continue to do so throughout this period as part of their own remedial actions. The extent of their reduced expenditure is still unfolding but we draw some confidence from the increased communications work we are undertaking for a select number of our high-quality clients across sectors such as government, financial services, insurance, and FMCG, in response to the immediate demands of consumers and change in consumer behaviours.

The strategic transformation plan that we announced on 24th February 2020 will be accelerated as we move to consolidate many of the functions and assets used across our group of leading brands and talented people. This will lead to increased operational efficiencies and cost reduction opportunities.

Immediate cost reduction actions that include:

– A voluntary reduction in base salaries for our paid Board directors, CEO and senior leadership team;
– A voluntary program of nine-day fortnights and 4-day weeks and utilisation of employee leave balances across our business;
– Management of employee costs through a reduction in the use of freelance resources, limited new hires, a significant restriction in salary increases and a commitment to enhanced intra-group resource sharing;
– A cessation of all international and domestic business travel;
– Minimisation of capital expenditure;
– Reduction in property footprint through consolidation of lease space.

These actions may change as we gain further clarity over the depth and timing of the COVID-19 financial impact. Other operating cost reductions will be implemented across our group in those areas where revenue declines are expected to be the most significant and lasting.

Read full notice to the ASX here.