Author: Fiona Craig

WPP PLC (LSE:WPP) reported a sharp fall in profits for 2025 after recording significant impairment charges, while warning that trading conditions are expected to remain challenging into the first half of 2026, sending the company’s shares more than 8% lower following the announcement.

Reported operating profit dropped 71.2% year-on-year to £382 million from £1.33 billion, largely due to £641 million in goodwill impairments. Diluted earnings per share swung to a loss of 20 pence, compared with earnings of 49.4 pence in 2024.

Group revenue declined 8.1% to £13.55 billion. Revenue less pass-through costs — a key industry measure — fell 10.4% on a reported basis to £10.18 billion and decreased 5.4% on a like-for-like basis.

Headline operating profit decreased 22.6% to £1.32 billion, with headline operating margin narrowing to 13% from 15% a year earlier, representing a 1.8 percentage-point decline on a like-for-like basis.

Total adjusting items amounted to £939 million, including £641 million in goodwill impairments and £114 million related to property impairments. The company also incurred £68 million in restructuring and transformation expenses.

WPP proposed a final dividend of 7.5 pence per share, bringing the total dividend for the year to 15 pence, significantly lower than the 39.4 pence distributed in 2024.

Chief executive Cindy Rose said the group’s recent underperformance had been driven by “excessive organisational complexity, lack of an integrated operating model and inconsistent strategic execution.”

She added, “Our recent underperformance has been driven by excessive organisational complexity, a lack of an integrated operating model and inconsistent strategic execution.”

Looking ahead to 2026, WPP expects like-for-like revenue less pass-through costs to decline by a mid- to high-single-digit percentage in the first half of the year, followed by improving momentum in the second half. The company guided headline operating margin to a range of 12% to 13%.

Adjusted operating cash flow before working capital is forecast between £800 million and £900 million, including approximately £250 million of cash restructuring costs. Excluding those charges, adjusted operating cash flow before working capital is expected to reach £1 billion to £1.1 billion.

In 2025, adjusted operating cash flow before working capital totalled £1.19 billion, down from £1.34 billion the previous year. Adjusted free cash flow declined sharply to £202 million from £738 million, while reported net cash inflow from operating activities fell to £724 million from £1.41 billion.

Average adjusted net debt stood at £3.4 billion, slightly lower than £3.5 billion a year earlier. Adjusted net debt at year-end was £2.17 billion, while the net debt-to-headline EBITDA ratio increased to 2.1 times from 1.8 times.

Across business segments, Global Integrated Agencies reported a 5.7% like-for-like decline in revenue less pass-through costs during 2025, with WPP Media down 5.9%. Other Global Integrated Agencies fell 5.6%, while Public Relations recorded a mid-single-digit decline. Specialist Agencies performed more resiliently, declining 0.7% for the year.

Regionally, North America revenue less pass-through costs decreased 4.6% like-for-like, while the United Kingdom declined 7.6%. Western Continental Europe fell 4.7%, and Rest of World revenues declined 5.9%, with India growing 3.8% and China contracting 14.3%.

Revenue from WPP’s top 25 clients declined 4.1% like-for-like in 2025. The company noted improved performance in healthcare accounts, although spending across several other client sectors weakened during the year.

WPP also unveiled a new multi-year strategy, “Elevate28,” aimed at delivering £500 million in annualised gross cost savings. The programme is expected to require approximately £400 million in cash costs over two years, with a significant portion of savings planned to be reinvested into media, commerce, production and enterprise solutions.

Derwent London (LSE:DLN) reported higher net asset value and a modest dividend increase for the 2025 financial year, supported by leasing activity and asset management gains across its portfolio.

Net asset value reached 3,225 pence per share at year-end, representing a 2.4% increase compared with the previous year. Earnings per share totalled 98.4 pence, while the company declared a full-year dividend of 81.5 pence per share.

During FY25, Derwent London completed new leasing agreements worth £11.3 million, achieved at rents 9.9% above estimated rental value. Since the start of the new financial year, the group has secured a further £1.5 million in leases, with £14.4 million currently under offer, including all office space at Network, and an additional £4.4 million under negotiation.

Asset management initiatives generated £58.9 million of activity, delivering rental uplifts of 6.4%. The company also progressed its capital recycling strategy, completing property disposals totalling £216.1 million during the year. A further £33 million has exchanged year to date, with roughly £240 million of additional transactions under offer.

The 25 Baker Street W1 development was fully pre-let, achieving an ungeared internal rate of return of 11.3%. The project delivered an accounting return of 5%, with earnings per share of 98.4 pence excluding 3.7 pence of trading profits.

Looking ahead, Derwent London expects estimated rental value growth across its portfolio of between 4% and 7% in fiscal year 2026. The company aims to complete £1 billion of disposals over the next three years and is targeting EPRA earnings growth of 25% to 30% by 2030.

Financial leverage remained stable, with net debt to EBITDA at 9 times, an interest coverage ratio of 3.1 times and a loan-to-value ratio of 29%, unchanged from the prior period.

The chief executive said the company expects continued increases in portfolio estimated rental values and EPRA earnings, while projecting total accounting returns of between 7% and 10% over the coming years.

Getlink (EU:GET) reported mixed second-half earnings alongside an enhanced shareholder return policy and updated guidance for 2026, with investors reacting cautiously as the shares moved around 1% lower following the announcement.

Second-half EBITDA reached €493 million, exceeding market expectations by 4.9%, supported by solid contributions from Eurotunnel and the ElecLink interconnector. ElecLink performance was boosted by a €50 million one-off insurance payment, helping lift the EBITDA margin to 57.6%, well ahead of the 54.5% consensus forecast.

Group revenue for the period totalled €856 million, broadly matching analyst estimates. However, free cash flow fell short of expectations, coming in at €156 million compared with forecasts of €193 million, a miss of roughly 19%.

For 2026, Getlink reaffirmed EBITDA guidance in a range of €820 million to €860 million. According to Jefferies, the midpoint represents an approximate 1% downgrade versus consensus expectations, largely reflecting a challenging comparison against the prior year’s ElecLink insurance benefit.

Alongside the results, the company introduced a revised capital returns framework, announcing plans to pay a dividend of €0.80 per share in 2026, increasing by €0.05 annually to reach €1 per share by 2030. Jefferies analyst Graham Hunt said this payout trajectory stands around 23% to 30% above current market forecasts.

“2026 guidance is a ~1% cut at the midpoint, but all focus will be on shareholder returns, which sees dividend move ~30% above cons. to €0.8/sh, growing 5c/year to 2030 and puts GET on ~4.5% yield,” Hunt wrote.

Over the longer term, Getlink reiterated its ambition to deliver €1 billion in EBITDA by 2030, approximately 2% higher than consensus projections, while forecasting an additional 2.3 million high-speed rail passengers by the end of the decade — about 5% below prevailing market expectations.

Hunt noted that while the dividend increase represents a meaningful upgrade for investors, “no buyback will disappoint some.”

Separately, an analyst at RBC Capital Markets said they “expect an improvement rather than inflection in Eurotunnel’s performance.”

“Our FY26 forecasts are ahead of consensus, with Eleclink positioned for a return to top-line growth,” they added.

French energy group Engie SA (EU:ENGI) has agreed to acquire UK Power Networks in a deal valuing the UK electricity distribution operator at a £10.5 billion equity price, marking a major expansion of ENGIE’s regulated infrastructure portfolio.

The transaction assigns an enterprise value of approximately £15.8 billion to UK Power Networks, equivalent to around 1.5 times its projected regulated asset value as of March 2026 and roughly 10 times forecast 2027 EBITDA, including contributions from non-regulated activities.

UK Power Networks reported a regulated asset value of £9.2 billion at the end of March 2025, which is expected to increase to £10.5 billion by the conclusion of the current regulatory price control period in March 2028.

ENGIE said it will fund the acquisition through a combination of financing measures, including around €5 billion raised via debt and hybrid instruments, alongside a planned divestment programme targeting approximately €4 billion by 2028. The company also intends to raise up to €3 billion through an accelerated book-building equity offering to maintain its commitment to a strong Investment Grade credit profile.

The company expects the acquisition to deliver an immediate positive contribution to earnings and to be accretive from the first full year after completion, while supporting both its credit rating and dividend policy.

Completion of the transaction is anticipated in mid-2026, subject to regulatory clearances and approval from independent shareholders of the sellers’ Hong Kong-listed parent companies.

ENGIE estimates that, together with progress on its divestment programme, the deal will increase group employed capital by approximately €17–19 billion by the end of 2026. Net financial debt is expected to rise by between €13 billion and €15 billion over the same period.

Catherine MacGregor, CEO of ENGIE, stated that the acquisition represents a decisive step in strengthening ENGIE’s position as a leading utility for the energy transition and is fully aligned with the company’s ambition to become a key player in regulated electricity grid infrastructure. The transaction will enhance the Group’s growth trajectory and reduce its risk profile, providing greater visibility into future earnings, MacGregor stated.

Basil Scarsella, CEO of UK Power Networks, said the transaction marks a significant milestone in the history of UK Power Networks and for all its employees. By joining ENGIE, the company continues to be part of a global energy leader with the financial strength, industrial capabilities, and long-term vision to support its next phase of development, Scarsella said.

Greencoat UK Wind (LSE:UKW) reported solid cash generation and stable operational performance in its 2025 full-year results, while outlining a more cautious capital allocation strategy in response to ongoing sector valuation pressures.

The renewable infrastructure fund generated net cash flow of £291 million during the year and produced 5,403GWh of electricity, despite lower average wind speeds and softer power prices. Shareholders received total dividends of £226.8 million, equivalent to 10.35p per share, representing the company’s 12th consecutive year of dividend growth in line with its inflation-linked policy.

Management placed significant emphasis on balance sheet and capital management, completing £181 million of asset disposals at net asset value while repurchasing £109 million of shares at an average discount of 23% to NAV. The company also reduced debt principal by £168 million as part of efforts to strengthen financial resilience.

Persistent headwinds across the renewable investment trust sector, including pressure on net asset valuations and weaker investor sentiment, have left Greencoat UK Wind’s shares trading at a notable discount. In response, the company’s 2026 strategy will prioritise additional selective disposals, lower gearing levels, ongoing share buybacks and disciplined reinvestment aimed at restoring shareholder value.

Operationally, the portfolio generated enough renewable power to supply approximately 2.0 million homes and avoided an estimated 2.2 million tonnes of carbon dioxide emissions during the year. The group also invested £6.7 million into community initiatives linked to its wind farm operations.

Looking ahead, management highlighted strong structural support for UK wind generation, underpinned by policy backing and rising electricity demand. The company sees opportunities emerging from secondary market transactions and new-build developments, even as the broader renewable investment trust sector continues to face challenges from lower wholesale power prices and regulatory uncertainty.

The company’s outlook is moderated by weaker profitability and revenue trends despite strong cash flow generation and a manageable balance sheet. Technical indicators currently suggest mildly negative momentum, while valuation support comes primarily from the fund’s high dividend yield, partly offset by a negative price-to-earnings profile. Share buybacks provide some positive support, though regulatory risks remain a consideration.

More about Greencoat UK Wind

Greencoat UK Wind is a listed renewable infrastructure investment company focused on owning and operating UK wind farms. Its strategy aims to deliver dividends that grow in line with CPI inflation while preserving long-term capital value through reinvestment of surplus cash flow. The fund provides investors with direct exposure to UK wind energy assets and has distributed more than £1.4 billion in dividends since inception.

Empire Metals (LSE:EEE) has obtained Depository Trust Company (DTC) eligibility for its common shares in the United States, a step expected to simplify electronic clearing and settlement for investors trading the stock on the OTCQX market under the EPMLF ticker.

The company said the change should enhance trading efficiency by enabling settlement through standard U.S. market infrastructure, improving liquidity and broadening access to its shares across American brokerage platforms. Management believes the move will make it easier for both institutional and retail investors in the U.S. to participate as the company advances development of its Pitfield titanium project.

DTC eligibility was described as a strategic milestone, reducing cross-border trading friction for existing shareholders while strengthening Empire Metals’ capital markets profile. The company is seeking to expand investor engagement at a time when its Western Australia-based titanium resource is positioned to benefit from rising global demand for critical minerals.

Despite improving market visibility, the company’s outlook remains constrained by financial fundamentals, including its pre-revenue status, widening losses and increasing cash burn. Positive technical momentum, reflected in share price strength relative to key moving averages and supportive MACD indicators, provides some counterbalance, alongside a conservative balance sheet with low leverage. Valuation metrics remain pressured due to negative earnings and the absence of a dividend yield.

More about Empire Metals

Empire Metals is an AIM-quoted and OTCQX-traded natural resources company focused on mineral exploration and development. Its flagship asset, the Pitfield Titanium Project in Western Australia, hosts one of the world’s largest and highest-grade titanium resources, with a mineral resource estimate of 2.2 billion tonnes grading 5.1% TiO₂. The project benefits from existing infrastructure and conventional processing pathways, offering significant potential for future expansion.