British advertising giant WPP said on Thursday that 2023 net profit tumbled on falling client spending and large accounting charges, but issued a rosy outlook and flagged its investments in artificial intelligence.

Profit after tax tanked more than 80 percent to £110 million ($139 million) last year from £683 million in 2022, WPP reported.

The performance was hit by an accounting charge after the merger of two of its creative ad agencies, and also by property impairments.

Total revenue rose almost three percent to £14.8 billion, but fell in the United States.

"While 2023 was more challenging than we expected due to cuts in spending by technology clients, we delivered a resilient performance for the year," chief executive Mark Read said in the earnings statement.

"This was driven by disciplined cost control, while continuing to invest in AI, data and technology."

WPP, whose major competitor is Publicis of France, issued a "optimistic" outlook.

"We are optimistic about the strategic opportunities ahead of us and are confident that we can deliver accelerated and increasingly profitable growth over the medium term," said Read.

He added that the group's artificial intelligence (AI) platform was growing.

"AI will be fundamental for our business and we are embracing the opportunities that it presents, putting it at the heart of our operations and our work for clients," said Read.

He noted that its AI-powered platform, WPP Open, is used by more than 30,000 people across WPP, "with growing adoption by" clients.

WPP also maintained its dividend. However, the stock slid almost three percent in morning deals on a London stock market that was flat overall.

"Ultimately, WPP is an economic bellwether, which will struggle to really thrive until corporate purse strings are a bit more fast-and-loose," noted Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

"It's throwing money at improving its offering, including AI capabilities. There will be some trepidation surrounding exactly when these hefty investments will bear meaningful fruit, but it's a step in the right direction."