Listed advertising firm, WPP Scangroup, has blamed foreign exchange losses of KSh250 million for their recorded losses for the half-year results – citing the need to mitigate risks associated with fluctuating foreign exchange rates.
- The results for this year plummeted by 102.6% from KSh124.5 million in H1 2023 to KSh252.3 in the current period.
- The firm also reported a slump in gross profit by 8% from KSh1.06 billion in H1 2023 to KSh972.3 million in the recorded half of this year.
- WPP Scangroup has also seen a massive reduction in revenue but due to staff layoffs made in March this year, the operating costs were slashed by KSh341 million.
“The financial results were also negatively affected by the strengthening of the Kenyan shilling, which led to an increase in foreign exchange losses compared to foreign exchange gains experienced in the previous year,” the company said in its report.
The firm employed various strategies to solidify their business in H1, including establishing digital, technology, and influence centers of excellence that were meant to optimize performance. WPP Scangroup also sought to analyze loss-making fractions of its business to reshape them into avenues that facilitate growth.
WPP Scangroup intends to exercise caution in treading the market in H2 due to prevailing risks of social unrest occasioned by protests. The company is buckling up for reduced clientele as other companies cut advertising costs to adjust to the dangers that persist.
The listed entity saw a slight reduction in its assets from KSh8.2 billion in H1 2023 to KSh7.2 billion in H1 2024. The company’s tax obligations rose from KSh18 million last year to KSh46 million in the same period this year.
WPP Scangroup’s share price at the NSE since the start of the year has fallen by 3.7% and currently stands at KSh2.10. The company is facing a grim future as advertisement models change in line with digital media trends.
Scangroup is also staring at a lawsuit from its former CEO, Bharat Thakrar, who was ousted in 2021. The discontented founder is pursuing damages worth KSh4.3 billion.
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