Premium
Scangroup exits Tanzania in turnaround plan after losses
WPP Scangroup reported a loss of Sh713.6 million for the period.
What you need to know:
- Revenue drop was attributed to the loss of a material client, which had forced the company to issue a profit warning in December.
Listed marketing services firm WPP Scangroup has dipped further into loss territory in the full year to December 2025, with the company now disclosing plans to cut back operations in Tanzania as part of a turnaround strategy.
WPP Scangroup reported a loss of Sh713.6 million for the period, up from a net loss of Sh506.7 million recorded in the year to December 2024, attributable to a 16 percent decline in revenues.
Revenue drop was attributed to the loss of a material client, which had forced the company to issue a profit warning in December after it parted ways with Airtel Africa, a customer who accounted for nearly a fifth of the firm's annual sales.
The company, which last year did staff restructuring to cut costs, has disclosed it will no longer have permanent operations in Tanzania but will serve the market through partnerships with other companies.
“In 2025, gross profit declined to Sh1.46 billion…. This was primarily driven by client losses during the year and reduced media and advertising spend from certain clients,” said the company.
Its interest income declined by Sh110 million following a decline in interest rates. A stabilisation of the Kenyan shilling, however, helped the company record a forex gain of Sh51.9 million, up from a loss of Sh248.7 million in 2024 when the currency was volatile.
WPP Scangroup moved to cut costs to protect its margin with operating and administrative expenses decreasing by Sh63 million, or 2 percent. The group incurred a one-off staff restructuring cost of Sh176 million.
The group is now looking to cut fixed costs associated with running operations in Tanzania by moving to a partnership arrangement.
“From April 2026, the group business in Tanzania is transitioning from a fixed, in-market delivery model to a partnership market access model,” said the company.
“This strategic shift will enable the group to continue serving its clients and partners through best-in-class local partners, while maintaining operational flexibility,” it added.
The strategy shift will see advertising units, Scanad Tanzania Ltd, J.Walter Thompson Tanzania, and Ogilvy Africa Tanzania fall dormant.
WPP Scangroup is also banking on a new client base, including expansion to the SME sector, to grow its revenues and return to profitability with the last full year profit posted in 2023.
“We secured new accounts, expanded our SME portfolio, and retained a significant portion of our clients, underscoring the strength of our core relationships,” said the company.
WPP Scangroup's share price at the Nairobi Securities Exchange has shed 19.72 percent in the last six months to trade at Sh2.32 each as of Thursday last week, April 24.
Follow our WhatsApp channel for breaking news updates and more stories like this.
