Just 3pc of workers back in the office at WPP as it reports £2.5bn loss

Advertising agency hit by £2.7bn writedown but cheers investors by declaring interim dividend of 10 pence a share

Advertising giant WPP revealed that just 3pc of its UK workforce are regularly going back to the office as it announced plans to resume its dividend despite sinking to a massive half-year loss. 

WPP said that just 300 of 10,000 UK-based employees are working in its British offices, a further sign that the UK is lagging behind other countries in getting staff back to the workplace. 

In comparison, 17pc of its German staff and more than three-quarters of its Chinese employees are back in the office. 

It came as firm declared an interim dividend of 10 pence per share even as it swung £2.45bn into the red after slashing the valuations of its businesses.

The world's biggest ad group said trading improved in July and it won more business than its rivals, suggesting the worst of the crisis may have passed.

Shares rose 6.5pc to 664.4p on Thursday. 

Chief executive Mark Read said: "Assuming there is no second wave nor major lockdowns, the second quarter is expected to be the toughest period of the year, although we remain cautious on the speed of recovery."

Mr Read added that the surprise return to dividend payments could be extended, even if its outlook worsened. 

In light of the crisis, WPP took an impairment charge of £2.7bn as it cut the value of acquisitions. It said the move was driven by a combination of higher discount rates, a lower profit base in 2020 and lower industry growth rates.

Like-for-like revenues fell almost 12pc to £5.6bn for the six months to June, but improved in the second quarter as trading picked up. 

The crisis has shifted advertising budgets even further towards digital marketing, where WPP has struggled to hold its own against big tech behemoths such as Google and Facebook.

WPP previously pulled its dividend, share buyback and 2020 guidance on March 31 as it braced for the full impact of the pandemic.

The FTSE 100 firm added it was on track to make savings at the upper end of its targeted £700m to £800m.

Analysts at Citi said: "WPP has delivered a decent set of results at the topline which should settle nerves. We think for the stock to really start to recover, however, the group needs to see an inflection in growth in [the second half]. Although it is early days, forward looking commentary is encouraging."

Meanwhile Roddie Davidson, an analyst at Shore Capital, said: "The on-going impact of the Covid-19 pandemic on WPP’s trading environment remains uncertain and difficult to call and we remain cautious on the outlook for adverting spend through the remainder of this year.

"That said we are encouraged by the signs of improvement, strong new business performance and financial strength flagged in today’s results."