WPP has been relegated from the FTSE 100 after nearly 30 years, as the advertising multinational struggles to stem an exodus of clients and match the artificial intelligence and data capabilities of rivals.
The market valuation of WPP, once the world’s largest advertising group, has plummeted from about £24bn in 2017 to £3.1bn.
The company’s share price has plunged by two-thirds this year and it has been relegated from the blue chip index after a quarterly reshuffle, confirmed when stock markets closed on Wednesday afternoon.
British Land, which was the most valuable company in the FTSE 250, was promoted to the FTSE 100 to take the spot vacated by WPP. The property company’s shares are up 17% this year, to value it at more than £4bn.
WPP has issued two profit warnings this year and Cindy Rose, who took over as chief executive after Mark Read was ousted in June, has launched a strategic review, admitting that the company has “not gone far enough or fast enough in adapting to the evolving needs of our clients”.
WPP, founded in 1985 by Sir Martin Sorrell, who built a global advertising powerhouse out of a small, Kent-based maker of wire baskets, had been in the FTSE 100 since 1998.
“I was in the room with Sorrell when the business entered the FTSE 100 … the jubilation,” said Alex DeGroote, a media analyst. “This is a moment, the end of an era really. It is sad. Advertising … is an industry where Britain had a global leader. To fall out is pretty ignominious and there is no obvious route back.”
WPP is investing heavily in AI tools but has been slow to adapt to a changing market and is being outgunned, principally by France’s Publicis Groupe, which took its crown as the biggest ad group in the world by revenue last year.
Given WPP’s parlous state, analysts believe Rose may have only a year to turn the business around – or break up the company, which has become a takeover target.
In September’s reshuffle the housebuilder Taylor Wimpey, led by Jennie Daly, was relegated from the FTSE 100. Daly’s departure, and the relegation of Rose’s WPP, will leave just seven female chief executives in the blue chip index. The GSK boss, Emma Walmsley, and the Severn Trent chief, Liv Garfield, both longstanding FTSE CEOs, have recently announced their departures.
