BUSINESS LIVE: Rolls-Royce profits double; Lloyds lifts investor payouts; WPP suffers ‘challenging’ 2023

WPP’s key revenue metric rose 0.3 percent in the latest quarter as weak spending by U.S. retail, healthcare and technology clients curbed growth in Britain and India.

The British advertising group, which owns Ogilvy and GroupM, reported a like-for-like rise of 0.9 percent in 2023 revenue less transfer costs to £11.86 billion, in line with its guidance.

The group met forecasts despite weakness in the fourth quarter in the US, where the key metric fell 4.5 percent, a deterioration from the 4.1 percent decline recorded in the previous quarter.

“While 2023 was more challenging than we expected due to cuts in technology customer spending, we delivered a resilient performance during the year,” said CEO Mark Read.

“We are optimistic about the strategic opportunities ahead and confident that we will be able to achieve accelerated and increasingly profitable growth in the medium term.”

Lloyds Banking Group’s profits rose 57 percent in 2023 as the lender shrugged off Britain’s faltering economy and a charge for potential costs arising from a regulatory overhaul of car finance.

Pre-tax profits hit £7.5bn over the 12-month period, up from £4.8bn in 2022 and slightly above the £7.4bn expected by analysts.

The group, which also encompasses the Halifax, Bank of Scotland and Scottish Widows brands, announced a final dividend of 1.84p and a £2bn share buyback.

‘In 2023, the Group remained focused on proactively supporting people and businesses through persistent cost of living pressures, while funding its ambitions and growth. This has been accompanied by strong progress on our strategy and delivering greater returns for shareholders, guided as always by our core objective of helping Britain to prosper.

‘The Group delivered a strong financial performance, meeting our 2023 guidance, driven by revenue growth, cost discipline and strong asset quality. This performance allowed strong capital generation and greater distributions to shareholders.

‘2023 was a pivotal year in moving towards the ambitious strategy we announced two years ago, as we look to grow our business and deepen our customer relationships. As demonstrated in our recent strategic seminars, we have made significant progress and are on track to achieve our strategic results for 2024 and 2026, helping us move towards higher and more sustainable returns.

‘Our strategy is driven by purpose. Central to this is building a more sustainable and inclusive future, including our commitment to supporting the environmental transition, social housing and broader purpose-aligned goals. “We are excited about the opportunities ahead as we continue to deliver for all of our stakeholders.”

On March 6, Chancellor Jeremy Hunt will release his spring budget.

In what could well be an election year, the Government will be keen to attract voters with policies that protect the pounds in their pockets.

That means tax cuts are likely on the table. However, Hunt already announced several tax cuts in last year’s Autumn Statement, and weaker public finances mean his power to cut them further may be limited.

Rolls-Royce’s profits more than doubled last year to £1.6bn, beating market forecasts, thanks to booming demand for the British engineering giant’s aircraft engines.

The performance beat analyst forecasts of £1.4bn and Rolls’ own guidance of £1.2bn to £1.4bn, having risen from the £652m it earned in 2022.

Rolls has forecast underlying operating profit growth of at least 6 per cent by 2024, predicting a range of between £1.7 billion and £2 billion, compared to the current consensus forecast of £1.7 billion.

It reflects solid growth under Chief Executive Tufan Erginbilgic, the former BP executive who took the helm a year ago.

‘Our transformation has delivered record performance in 2023, driven by business optimization, cost efficiency and progress on our strategic initiatives. This step-change has been achieved across all our divisions, despite a volatile environment with geopolitical uncertainty, supply chain challenges and inflationary pressures.

‘We are managing the business differently and our significant improvement in performance over the year reflects the hard work and focused actions of all our teams. We also continue to invest to drive sustainable growth in the future. Our strong performance in 2023 gives us confidence in our guidance for 2024 and is an important step towards our medium-term objectives. “We are unleashing our full potential as a high-performance, competitive, resilient and growing Rolls-Royce.”