Analysts less impressed by IWG performance
IWG’s improving operational performance has been overshadowed by inflation fears, with analysts trimming profit forecasts.
The serviced offices giant had cautioned that costs were rising by more than its businesses had budgeted for, but founder and chief executive Mark Dixon dismissed it as “a bit of a bump”.
Analysts were less optimistic. Sam Dindol, an analyst at broker Stifel, said he would be reducing his underlying earnings forecasts for this year by a “mid to high single-digit percentage” given the rising costs.
IWG’s improving operational performance has been overshadowed by inflation fears, with analysts trimming profit forecasts.
The serviced offices giant had cautioned that costs were rising by more than its businesses had budgeted for, but founder and chief executive Mark Dixon dismissed it as “a bit of a bump”.
Analysts were less optimistic. Sam Dindol, an analyst at broker Stifel, said he would be reducing his underlying earnings forecasts for this year by a “mid to high single-digit percentage” given the rising costs.
Michael Donnelly, an analyst at Investec, said he had lowered his full-year profit forecast from about £148m to £123m.
The gloomy outlook weighed on the IWG share price, which fell by 19p, or 7.5%, to 234.75p, leaving the stock languishing towards the bottom of the FTSE 250.
Increased costs could eventually be passed on via rents, but would take some time to trickle through, said Dixon.
“We are at a crossroads. The number of deals we are doing directly with property owners to expand the network is unprecedented,” he added.
The Times (£)
The FT (£)
