NSE listed advertising agency, WPP Scangroup, has issued a profit warning saying earnings for the year ending December 2025 will fall by at least 25%, extending a period of financial strain marked by client losses, management changes and repeated restructuring at the listed advertising group.
- •The company said the earnings decline will stem from weaker client spending, the loss of a material account, lower interest income and one-off restructuring costs exceeding KSh 160 million.
- • The warning meets the formal 25% threshold under CMA disclosure rules and applies to consolidated group earnings.
- •The announcement marks the third consecutive year of a profit warning and the fourth in five years, following similar alerts in 2021, 2023 and 2024.
Profit before tax swung to a loss of KSh 426.7 million in 2024 after a modest profit of KSh 378.0 million in 2023. Profit after tax followed the same path, reversing from a KSh 130.1 million profit in 2023 to a KSh 506.7 million loss in 2024.
Both metrics remain far below early-2010s levels, when annual profits exceeded KSh 900 million.
While reported revenue dropped sharply in 2024, management has attributed most of the fall to an IFRS 15 change that shifted media buying income to a net, agent-based presentation. That accounting restatement did not affect gross profit or cash flows. Gross profit, the more consistent performance measure, has declined steadily over the past decade, falling from above KSh 5.0 billion in the mid-2010s to KSh 2.01 billion in 2024.
Operational pressures have intensified in recent months. The group has lost key accounts, including Airtel Africa, a long-standing client that contributed a significant share of billings. Client attrition has coincided with senior management turnover and staff restructuring as the company seeks to align costs with a smaller fee base.
WPP Scangroup has also undergone leadership changes, with board and executive reshuffles aimed at stabilising operations after repeated earnings setbacks. Cost-cutting measures have reduced losses at times but have not restored sustained profitability.
The latest warning suggests 2025 will bring further strain. Unlike the 2024 revenue drop, which was driven largely by accounting presentation, the 2025 outlook reflects underlying earnings weakness.
