WPP ScanGroup has reported a 16% drop in gross profit for the first half of 2025, as global macroeconomic headwinds and reduced client spending in key markets weighed on performance. The Nairobi-listed marketing and communications firm said the downturn reflected tougher trading conditions across several markets. However, management underscored resilience, pointing to a KES 32 million cut in operating and administrative expenses, which demonstrates ongoing cost discipline.
One of the most notable improvements came from currency markets. The Kenyan shilling’s relative stability in H1 2025 sharply reduced ScanGroup’s foreign exchange losses to KSh 6 million, down from KSh 250 million in the same period last year.
This dramatic turnaround highlights the importance of exchange rate stability for corporates in emerging markets, where volatile currencies often erode earnings. By comparison, 2024 was marked by sharp currency swings that hit ScanGroup and other firms with high foreign currency exposure.
The firm reported a half-year net loss of KSh 208.3 million for the six months ended June 30, 2025, marking an improvement from the KSh 252.3 million loss posted a year earlier. Gross profit fell 16% to KSh 814.6 million, reflecting subdued demand for advertising and communications services, while other income declined sharply to KSh 5 million from KSh 61.6 million.
Operating and administrative expenses, however, eased slightly to KSh 1.08 billion from KSh 1.11 billion, underscoring management’s efforts to contain costs in a challenging business environment.
The company said it is advancing its digital, technology, and influence centres of excellence, which it views as central to future growth. Management noted that these initiatives form the foundation for operational excellence and are expected to enhance overall performance in the medium term.
“We are actively advancing our strategic priorities through the focused implementation of our Digital, Technology, and Influence Centers of Excellence. These initiatives serve as foundational drivers of operational excellence and are expected to significantly enhance the Group’s overall performance. To accelerate their return to sustainable growth, we are focusing on service lines that are growing and future-facing,” the company said in its commentary.
Despite the fall in profits, management stressed that operational stability remains a priority. The reduction in operating and administrative expenses by KSh 32 million underscores ongoing efforts to streamline operations while maintaining core client services.
The firm acknowledged that global economic headwinds are likely to continue affecting discretionary spending, which may moderate near-term growth. However, ScanGroup said its focus for the rest of 2025 will be to preserve stability across its client portfolio while preparing for recovery in a cost-conscious manner.
“Amid global economic headwinds, we anticipate continued pressure on discretionary spending, which may moderate near-term growth. In this environment, our immediate priorities will be maintaining operational stability while making selective investments in areas such as content, data and technology,” the company noted.
The Board of Directors announced that it would not recommend an interim dividend for the half-year period. Accounting policies used in the preparation of the financial statements were consistent with those applied in 2024, ensuring comparability.
Looking ahead, ScanGroup said it is well positioned to evolve with the market. “Our foundational strengths put us in a strong position to evolve ahead of the market,” management said, adding that the outlook for the second half of the year is centred on cost-conscious growth and client stability.
The decline in profits mirrors challenges faced by companies across emerging markets in 2025, where inflationary pressures, shifting capital flows, and muted consumer demand continue to weigh on corporate earnings.
However, Kenya’s relatively stable currency has offered some relief. For ScanGroup, this translated into a sharp reduction in forex losses, reinforcing the importance of exchange rate trends for listed companies and investors in the region.
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