WPP AUNZ (ASX: WPP) share price is soaring after the company announced an upbeat outlook for FY21, and an updated takeover proposal.
The post WPP AUNZ (ASX:WPP) share price skyrockets 22% after 2 major announcements appeared first on The Motley Fool Australia. –
Shares in public relations and marketing company WPP Aunz Ltd (ASX: WPP) shot up 22% today as the company emerged from a trading halt. This follows 2 major announcements today.
At the time of writing, the WPP AUNZ share price is trading at 70 cents, up 12 cents.
Strong trading outlook update
The PR company provided business outlooks for the financial year ending 31 December 2020 (FY20), and also the financial year ending 31 December 2021 (FY21).
WPP AUNZ advised its FY20 net sales are expected to be between $607 million and $610 million, a decline of around 14% to 15% on FY19. This is primarily due to the impact of COVID-19.
The FY20 headline earnings before interest and tax (EBIT) is expected to be $59 million to $62 million.
For FY21 meanwhile, the company expects to see net sales of between $630 million and $650 million, an increase from FY20.
Headline EBIT is also expected to come in higher than FY20, between $85 million and $95 million.
WPP AUNZ is also on track to deliver $70 million in cost savings for 2020. These sustainable cost measures are expected to provide a benefit of approximately $65 million in FY21.
The company expects to declare a dividend as part of its FY20 result, which will be announced in late February 2021.
Takeover proposal update
Also today, WPP AUNZ advised that its parent company, British-based WPP plc (LSE: WPP), has lifted its offer price to buy out the remaining shares it doesn’t already own to 70 cents a share.
The offer – originally announced on 30 November – was previously at 55 cents, and was revised as WPP agreed to WPP AUNZ declaring and paying total and special dividends of up to 15 cents a share. The new offer values the WPP AUNZ at at an enterprise value of $717 million.
About the WPP AUNZ share price
The WPP AUNZ share price has increased by around 5% this year, after plunging by 66% to 18.5 cents in March – its 52-week low. The 52-week high on the other hand, is 63.5 cents.
The company commands a market cap of $485 million.
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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.