WPP ScanGroup reported a 2% increase in gross profit for the first half of 2023, despite a challenging operating environment.
The company attributed its growth to organic expansion from existing clients and new client wins across its markets.
However, the company also incurred a one-off severance cost of 178 million shillings in the second quarter of 2023, as part of a comprehensive restructuring programme to reduce its cost base and reshape its staff structure.
WPP ScanGroup said the programme was aimed at making the organisation more agile, efficient and future-ready, and that it expected to recoup the severance investment by 2024.
The severance cost resulted in a loss before tax of 106 million shillings for the first half of 2023, compared to a profit of 9.6 million shillings in the same period of 2022.
The marketing and communications company in Africa also recorded a higher exchange gain of 182 million shillings, due to the depreciation of the Kenyan shilling, Ghana cedi and Nigerian naira against major currencies.
As a result, it posted a net loss of 124.5 million shillings for the first half of 2023, compared to a net loss of 47 million shillings in the first half of 2022.
The company did not declare an interim dividend.
The company’s management expressed confidence that the restructuring programme would enable the company to deliver better value to its clients and shareholders in the long term
“Despite the continued inflation and increase in cost of living in several of our markets, we see some momentum and are optimistic about growth in the second half of the year driven predominantly by technology-backed solutions,” WPP ScanGroup said.
