Flex operator IWG warns on profit
IWG is anticipating a “significant impact” on its results for 2021, with group EBITDA profit now expected to be “well below” the level achieved in 2020.
EBITDA, adjusted for costs relating to Covid, in 2020 was £1.2bn. The group reported an operating loss of £352m during its 2020 financial year and a pretax loss of £650m.
IWG said: “While we have continued to see strong recovery in some of our markets since our first-quarter trading update, including positive occupancy momentum in the US, the overall improvement in occupancy across the whole group has been lower than previously anticipated as a result of the prolonged impact of Covid-19, including continuing lockdown restrictions and the emergence of new variants of the virus in some markets.”
IWG is anticipating a “significant impact” on its results for 2021, with group EBITDA profit now expected to be “well below” the level achieved in 2020.
EBITDA, adjusted for costs relating to Covid, in 2020 was £1.2bn. The group reported an operating loss of £352m during its 2020 financial year and a pretax loss of £650m.
IWG said: “While we have continued to see strong recovery in some of our markets since our first-quarter trading update, including positive occupancy momentum in the US, the overall improvement in occupancy across the whole group has been lower than previously anticipated as a result of the prolonged impact of Covid-19, including continuing lockdown restrictions and the emergence of new variants of the virus in some markets.”
It went on to say it had seen “unprecedented demand” for its flex products and had a “very strong pipeline of potential partners”.
As such it said that the negative results for 2021 were merely an issue of timing and that it expected a strong recovery in 2022 and that it continues to maintain a strong financial position with significant liquidity.
In last week’s EG Interview, IWG founder Mark Dixon said: “The key thing I have learned going through crises is to act decisively, communicate well and act early.”
During the pandemic, that has involved slashing directors’ salaries in half, cancelling its dividend to shareholders and renegotiating hundreds of leases.
By the end of the 2020 financial year, it had also shut down one in 20 offices in a slimming down operation.
“We did all that, then hunkered down early on and prepared for the worst while hoping for the best,” he said.
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Photo from IWG
