IWG hikes dividend and launches £100m share buyback
IWG has proposed a 10.3% increase in interim dividend payments and a £100m share buyback programme in its results for the six months to 30 June 2019.
The co-working operator has posted a 10% rise in group revenue to £1.3bn and a 15% increase in open centre revenue to £1.28bn, on a constant currency basis. Profit before tax fell 4% to £42.8m.
Mark Dixon, chief executive of IWG, said: “Even in this period of global, political and economic uncertainty, we expect the positive momentum to continue in our business and this is reflected in the increased proposed dividend and £100m share repurchase programme.”
IWG has proposed a 10.3% increase in interim dividend payments and a £100m share buyback programme in its results for the six months to 30 June 2019.
The co-working operator has posted a 10% rise in group revenue to £1.3bn and a 15% increase in open centre revenue to £1.28bn, on a constant currency basis. Profit before tax fell 4% to £42.8m.
Mark Dixon, chief executive of IWG, said: “Even in this period of global, political and economic uncertainty, we expect the positive momentum to continue in our business and this is reflected in the increased proposed dividend and £100m share repurchase programme.”
The firm’s 2019 interim dividend is 2.15p compared to 1.95p in the first half of 2018.
IWG’s results also reveal the firm’s lease liabilities stand at £5.9bn, following the introduction of new accounting standards, IFRS.
Previously, only a limited set of information about operating leases has been reported in annual financial reports. Under the new IFRS 16 standards, companies are required to add new line items to the balance sheet for these operating leases.
Going forward, Dixon said IWG is well-placed to compete with rivals struggling in an oversupplied sector. “Our industry also continues to be increasingly recognised and mainstream, which means we are operating against a rapidly evolving backdrop. As the attractive characteristics of the flexible workspace market attracts more operators, there is evidence that some of these are becoming investment constrained, which may present IWG with opportunities.”
However, IWG will continue to rationalise its portfolio where appropriate. The firm said: “Where locations no longer fit into our network, or have been underperforming, we have been increasingly proactive in rationalising the network. This adversely impacted gross profit by £10.2m in the six months to 30 June 2019. We expect this focus to continue in the second half of 2019 and possibly into 2020.”
IWG has been ramping up its newer Spaces co-working offering in a bid to fight off competition from rival WeWork.
At the same time, it is also considering selling off some of its property portfolio, following aborted takeover talks with Starwood, Terra Firma and TDR.
In February, EG revealed a Regus subsidiary company in Stockley Park, west London, had applied for voluntary liquidation, which could see a major landlord lose out on around eight years of rent.
The firm is also ramping up its franchise programme. In April, IWG sold its Japanese operations to TKP Corporation for £320m and entered into an exclusive master franchise agreement for the country.
It said it had signed further franchise deals with multiple partners who had committed to over 300 locations.
To send feedback, e-mail anna.ward@egi.co.uk or tweet @annaroxelana or @estatesgazette
