IWG hopes to cash in on hybrid working after year of pandemic pain
Flexible working giant IWG has revealed that it sustained historic losses throughout last year as Covid-19 forced offices to shut and clients to work from home, but added that the pandemic recovery presented the group’s “greatest opportunity” in decades.
The London-listed company suffered a £650m pretax loss last year, down on profit of £77m in 2019, with boss Mark Dixon adding that he expected challenging market conditions to “prevail for a few months to come”.
IWG, which owns workspace brands including Regus, Spaces and Open Office, sustained specific Covid-19-related costs of £379.5m, with annual cost savings expected to be up to £375m.
Flexible working giant IWG has revealed that it sustained historic losses throughout last year as Covid-19 forced offices to shut and clients to work from home, but added that the pandemic recovery presented the group’s “greatest opportunity” in decades.
The London-listed company suffered a £650m pretax loss last year, down on profit of £77m in 2019, with boss Mark Dixon adding that he expected challenging market conditions to “prevail for a few months to come”.
IWG, which owns workspace brands including Regus, Spaces and Open Office, sustained specific Covid-19-related costs of £379.5m, with annual cost savings expected to be up to £375m.
It also spent £322.3m on shutting down hundreds of less profitable sites, as the company embarked on a radical programme of “network rationalisation” and sought to renegotiate leases.
However, a £320m equity placing and £350m bond offering had left it in a stronger financial position, the firm said, with £802.3m of available liquidity as of the end of last year.
It said this morning that despite the financial hit, it was a good position to capitalise on an anticipated surge in popularity of flexible working products, with companies widely expected to embrace a hybrid working model as they return to the office.
Dixon said: “Today, we anticipate a massive surge in growth when we eventually emerge from the unprecedented downturn that the Covid-19 pandemic has created.
“The sheer scale of our global network positions us uniquely well to benefit from this surging demand. At the same time, our franchising and management agreement strategies are performing to plan as the spearhead of our capital-light expansion strategy.
“In summary, we are progressing well on our plans to strengthen our position as the leading service provider to the global flexible workspace industry and I firmly believe that the years ahead will be tremendously exciting for our business.”
It comes after IWG, the world’s largest flexible office company, announced it had signed its biggest customer to date, having secured a deal with Japanese telecoms group Nippon Telegraph and Telephone to provide access to its worldwide office network for NTT’s 300,000 employees.
Under the terms of the three-year deal, NTT staff will be able to choose from more than 3,300 offices owned by IWG in which to work.
IWG also said it had enjoyed a record start to 2021, adding 500,000 users to its network before the NTT deal. Standard Chartered also agreed a deal with the company in recent months that will give the bank’s 95,000 workers access to IWG’s centres for a trial period of 12 months.
To send feedback, e-mail alex.daniel@egi.co.uk or tweet @alexmdaniel or @estatesgazette
