IWG cautiously optimistic despite continuing losses
IWG has “cautious optimism” for the rest of 2022, as revenues rise by 22.3% and earnings climb to £123m.
The firm announced its interim results this morning for the six months to 30 June, stating that system-wide revenue had risen from £1.17bn to nearly £1.45bn. UK revenue increased by 11.6% to £186m.
IWG said it made a gross profit of of £216m and adjusted EBITDA of £123m. But after adjustments – including Covid costs and those incurred from “geopolitical tensions” – and taxes, this was converted to an £81.3m loss. This represented a loss of 11.6p per share over the period.
IWG has “cautious optimism” for the rest of 2022, as revenues rise by 22.3% and earnings climb to £123m.
The firm announced its interim results this morning for the six months to 30 June, stating that system-wide revenue had risen from £1.17bn to nearly £1.45bn. UK revenue increased by 11.6% to £186m.
IWG said it made a gross profit of of £216m and adjusted EBITDA of £123m. But after adjustments – including Covid costs and those incurred from “geopolitical tensions” – and taxes, this was converted to an £81.3m loss. This represented a loss of 11.6p per share over the period.
Chief executive Mark Dixon said: “With hybrid working becoming the preferred operational model for a rapidly growing number of companies, we remain confident about the continuing structural growth drivers at play in our industry.
“Our strategy is focused on meeting this demand by increasing the growth and coverage of our network and we have excellent momentum in delivering capital light growth, enabled by an expanding base of franchise and property partners. We anticipate building our partnered network strongly in the second half of 2022 and beyond.”
IWG said it was on track for 50% of its 65m sq ft, 3,335-property estate to be capital-light partnerships and franchise deals by the year end.
It added that it was on track to build the world’s largest digital workspace platform following its £320m acquisition of The Instant Group in March.
“While it is early days, the Instant management team is making very good progress,” Dixon said. “The integration of the former IWG digital assets is going well.”
Other brands, including Davinci and Coworker, have been added to the digital platform and “further consolidation opportunities are anticipated”.
Dixon added: “Digitally connecting demand with supply in our fast-growing industry will help further unlock the significant market potential of flexible working and, we believe, create significant value.”
The deal, however, has significantly added to IWG’s debt. On a pre-IFRS reporting basis, the overall group cash outflow for the period was £344m, primarily reflecting the Instant deal. Net debt increased to £741.m from £397.m at 31 December 2021.
Dixon said: “We continue to build resilience and cost efficiency into our business, and we have repeatedly demonstrated our ability to address new challenges. These attributes will be important as we continue to navigate the headwinds created by increased geopolitical tensions in Europe, general inflationary pressures, and the ebb and flow of Covid-related restrictions in some markets.
“Overall therefore, we look forward with cautious optimism to the remainder of 2022.”
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