WPP wins major government contract, shares spark

(Sharecast News) - Shares in WPP rallied on Tuesday, after the advertising giant reportedly secured a major government contract worth around £2bn. According to The Times and trade magazine Campaign, WPP-owned agency Wavemaker has landed the four-year contract with the Cabinet Office following a competitive tender process.

It will see Wavemaker take responsibility for planning and buying advertising posts for hundreds of government campaigns, including donating blood and armed services recruitment.

The contract was previously held by US rival Omnicom, The Times noted.

The decision has not been formally confirmed, as it is now subject to a brief standstill period when all bidders are notified and any challenges considered. The final contract will only be awarded once that concludes.

A government spokesperson said: "We cannot comment on a live procurement process."

However, that did not stop WPP's shares spiking on the reports.

As at 1015 GMT, the stock had put on 5% at 313.2p, propelling it towards the top of the FTSE 100 leaders' board.

The contract will be seen as a significant and much-needed win for WPP, which is due to be demoted from the FTSE 100 later this month after nearly 30 years.

The advertising and marketing stalwart has been rocked by various headwinds, including client losses and the rise of artificial intelligence. It has issued two profit warnings this year alone, and in June chief executive Mark Read was ousted.

The share price has plunged 60% so far this year.

British Land will take its spot in the FTSE 100 when the reshuffles takes effect on 22 December.