Shares react positively to the news.
Media giant WPP names insider Mark Read as CEO ahead of results
- Ahead of its interim results tomorrow, marketing services giant has officially appointed Mark Read as its new chief executive
- While the news was unsurprising, the shares reacted with a modest rise in early morning trading
- We recommend WPP as a ‘buy’ for medium to higher risk investors
The world’s largest marketing services group WPP has named long-serving Mark Read as its new chief executive following the departure of founder Sir Martin Sorrell in April.
The story of how Sir Martin Sorrell took a supermarket trolley manufacturer and turned it into one of the world's leading advertising agencies has become part of British business legend. While Read has certainly risen through the ranks at WPP and has been running the company on an interim basis with Andrew Scott since April, he is unlikely to be as prominent a name as his predecessor.
Now set to take full control of WPP, Read has much on his plate following a period of tumult and uncertainty at WPP; it’s likely that the group will need to restructure, which has already started at the top with Read’s salary being half the amount of his successor.
In a fast changing environment for the group, investors will be hoping that Read’s long-term knowledge of the sector and business will be a steadying influence for what has been a difficult period for the group. There will be expectations of a new strategy, with the possibility of selling off parts of the business.
There is every chance that business will be consolidated over the medium term but investors should not expect change overnight. The group will announce its interim results on Tuesday 4 September which may well highlight the challenges that lie ahead for the new CEO.
For now, we stick with a medium to higher risk buy recommendation, but in the current environment we would suggest contrarian investors drip feed.
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.