WPP Scangroup PLC has issued a profit warning, alerting shareholders and investors that its consolidated earnings for the financial year ending 31 December 2025 are expected to fall significantly compared with the previous year.
In a formal announcement released under Kenya’s Capital Markets (Public Offers, Listings and Disclosures) Regulations 2023, the company said its net consolidated earnings for 2025 are projected to be at least 25% lower than those reported for the year ended 31 December 2024.
The statement, approved by the Capital Markets Authority, marks a notable shift in the outlook for the marketing and communications group, which operates across multiple African markets through its subsidiaries.
According to the board of directors, the lower earnings forecast reflects a combination of operational and market pressures that have weighed on the group’s financial performance during the year.
WPP Scangroup attributed the expected earnings decline partly to reduced revenue driven by lower client spending.
The company said cuts in marketing and advertising budgets among clients had affected demand for its services, a trend that has constrained revenue growth across parts of the business.
In addition, the group confirmed the loss of a material client during the period, which further weakened revenue performance and contributed to lower interest income.
While the company did not disclose the identity of the client or the financial impact in absolute terms, it described the loss as significant enough to influence overall earnings expectations for the year.
The announcement underscores the sensitivity of advertising and communications businesses to shifts in corporate spending, particularly in periods of economic uncertainty, when marketing budgets are often among the first to be reduced.
Alongside softer revenues, WPP Scangroup said it had undertaken a comprehensive restructuring programme aimed at reshaping the business to align with both current conditions and future client needs.
The restructuring focused on rightsizing the group’s cost base and reshaping its staff structure to improve operational efficiency and competitiveness. As part of this process, the company incurred a one-off severance cost exceeding KSh 160 million.
The severance expenses are included within operating and administrative costs for the year and were described as non-recurring. However, they have had a material impact on the group’s near-term earnings outlook.
The board said the restructuring was necessary to position the business for longer-term sustainability, even though it weighed on profitability in the short term.
The profit warning was issued in line with paragraph 14.5.7 of the Thirteenth Schedule to Kenya’s capital markets disclosure regulations, which require listed companies to promptly inform the market of any material changes to their financial outlook.
In its disclaimer, the company noted that the announcement was made for information purposes only and with the approval of the Capital Markets Authority.
The regulator, it added, does not assume responsibility for the accuracy of the statements contained in the notice.
Such disclosures are intended to promote transparency in the market and ensure that investors have timely access to information that could influence investment decisions.
Despite the challenging earnings outlook for 2025, WPP Scangroup said it continues to optimize and transform its operations across the group.
The company stated that its ongoing initiatives are focused on enhancing competitiveness and delivering long-term value.
The board did not provide detailed financial guidance beyond the earnings decline estimate, nor did it outline specific revenue or margin targets for future periods.
However, the emphasis on operational optimization suggests a continued focus on cost discipline and structural efficiency.
The announcement was issued by the company secretary, Winniefred Jumba, on behalf of the board on 19 December 2025.
Profit warnings are closely watched by investors as they often signal underlying shifts in business conditions.
In this case, the combination of reduced client spending, the loss of a major account, and restructuring costs highlights the pressures facing advertising and communications firms operating in increasingly competitive and cost-conscious markets.
While the restructuring costs are described as one-off, the scale of the expected earnings decline suggests that WPP Scangroup faces a period of adjustment as it works to stabilize revenues and realign its operating model.
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