WPP share price: Martin Sorrell wants higher dividend payout ratio target

on Nov 19, 2014

iNVEZZ.com, Wednesday, November 19: WPP Plc’s (LON:WPP) chief executive officer Martin Sorrell today said that, as a large shareholder in the company, he would like to see the payout ratio for its dividend raised to 50 percent from its current target of 45 percent.

Speaking today at the Morgan Stanley Tech, Media and Telecoms conference, Sorrell said that the board would discuss whether to set the bar higher if the target for this year is achieved.
“We have said that we will try to get to 45 percent payout ratio this year, that will probably happen, and then the board will have to sit down and decide whether they will go beyond 45 percent,” the CEO of the world’s largest advertising group said at the event, as quoted by Reuters.
“From my point of view as a significant shareholder in WPP… personally I would like to see an increase to 50 percent but whether that carries the board or not is another case,” he added.
Last year, WPP had a dividend pay-out ratio of 42 percent of headline diluted earnings per share.
In today’s trading, WPP shares were 0.5 percent higher at 1,295.00p, as of 13:45 UTC. The company’s shares have fallen 6.2 percent since the start of the year.
*h*Consolidation in ad industry*h*
At the conference, Sorrell also shared his expectations about how the ad industry landscape would change in the coming years, forecasting further consolidation in the sector, possibly around smaller rivals Havas and IPG. He expressed doubt that “in a few years time the situation will be as it is today”.
This year saw a failed attempt at a mega-merger between US ad giant Omnicom and French agency Publicis – WPP’s biggest rival in the sector. The collapse of the deal allowed the UK company to retain its title as the number one advertising group in the world.
*h*Analysts on WPP*h*
According to the Financial Times, the 27 analysts offering 12 month price targets for WPP have a median target of 1,470p, with a high estimate of 1,621p and a low estimate of 1,150p. As of November 15, 2014, the consensus forecast amongst 48 polled investment analysts covering WPP has it that the company will outperform the market. The same consensus forecast has been maintained since the sentiment of investment analysts improved on October 16, 2009, the FT notes.
**As of 14:20 UTC buy WPP shares at 1,298.00p**
**As of 14:20 UTC sell WPP shares at 1,297.00p**

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