Iwg (Regus office space) collapses in London, sank by guidance reduction

(Il Sole 24 Ore Radiocor) - International Workplace Group tumbled on the London Stock Exchange after cutting its guidance for 2025 in the wake of its half-year accounts and despite an increase in the amount of the buy back. The stock of the world's number one workspace company lost almost 18%.

Iwg, which is headquartered in Switzerland, has a presence in 121 countries and among others controls the Regus and Spaces brands, announced that its adjusted annual results will be at the lower end of the forecast range. Adjusted EBITDA is thus expected to be towards the lower end of the range between USD 525 million and USD 565 million, down from USD 557 million in 2024 (+11% on 2023). Iwg explained the downsizing by the impact of 'further investments in the growth of the Managed and Franchised segment'. The group said, however, that it was on track to achieve its mid-term target of at least USD 1 billion in Ebitda.

In the first half of the year, Iwg said it had invested $15m in the sales team of its Managed and Franchised division to accelerate its development, and this helped it sign 413 new contracts (+6.7%). The group's pre-tax profit plummeted 63% to $12 million for the six months ended 30 June from $32 million a year earlier, impacted by total finance costs of $56 million versus $36 million a year earlier. The group's network-wide revenue increased 1.9% to a record $2.16 billion, while consolidated revenue fell 1.1% to $1.85 billion. Adjusted Ebitda rose 6.1% to $262 million and cash flow jumped 33% to $48 million.

"The shift towards hybrid and local work is fuelling our business with the highest growth we have ever recorded in our history. In the first half, we added a record number of locations globally, with a total of 496 contracts signed and record sales," said founder and CEO Mark Dixon, pointing out that the majority of new workspace openings in the first half occurred in local, suburban or rural communities. Small towns in particular experienced a jump in new office locations, as was the case in the US in places like Franklin and Bloomfield Hills that have a population of less than 5,000.

"The long-term shift towards a hybrid labour model is one of the mega-trends of our time and represents a financial opportunity for Iwg. With more than 1.2 billion white-collar workers globally, our industry can address a total audience valued at more than $2 trillion," the CEO emphasised, adding that the company "is determined to capture more of this market in the coming months and years". By 2025, Iwg expects its cash flow to reach at least USD 140 million and has increased the size of its share buyback programme to at least USD 130 million from the previous USD 100 million. The company also announced an interim dividend of 0.45 cents per share, up 4.7 per cent.