Group revenue flat at flex giant IWG
Flex giant IWG has reported flat group revenue of $1.8bn (£1.4bn) in the six months ended 30 June, despite a 15% increase in revenue in its managed and franchised business.
System-wide revenue increased by 2% to almost $2.1bn.
The group, which operates the Regus, Spaces and Worka brands across more than 3,750 buildings in 120 countries, also nudged back into the black with pretax profit of $44m, up from a loss of $87m a year earlier.
Flex giant IWG has reported flat group revenue of $1.8bn (£1.4bn) in the six months ended 30 June, despite a 15% increase in revenue in its managed and franchised business.
System-wide revenue increased by 2% to almost $2.1bn.
The group, which operates the Regus, Spaces and Worka brands across more than 3,750 buildings in 120 countries, also nudged back into the black with pretax profit of $44m, up from a loss of $87m a year earlier.
Chief executive Mark Dixon said: “The first half of 2024 produced good year-on-year open-centre revenue growth. We are delivering on our capital-light growth plan. Momentum continues in signings, and importantly openings. We remain committed to our strategy of growing our network coverage and giving our customers a great day at work.”
IWG has been steadily reducing its capex, focusing instead on growth of its platform. Capital expenditure in the first half of this year was just $79m, down from $102m in 2023, and is expected to fall further.
Dixon said: “In contrast to the real estate industry, the workplace solutions industry enabling hybrid work continues to grow. Our story and business are one to be optimistic about. Demand for our platform is accelerating from both corporates trying to reduce their real estate costs while creating more flexible working environments, and their employees.
“We are uniquely positioned to service this structural demand shift. Our global network of brands and locations is a huge attraction to customers and partners, helping us to accelerate our growth in a capital-light fashion. As we enter the second half of the year, we are only at the start of the change to hybrid work and the flywheel of more coverage as demand is taking shape.”
He added that, to meet demand, IWG would be focused on increasing its supply-side growth to build a fee-based business.
In H1 2024, the firm opened 306 locations, which is more than it opened in the whole of 2023.
Looking ahead, Dixon said the business was entering H2 with “good momentum”.
“The new route to market of managed partnerships is fuelling growth, and we continue to sign new partnerships at a rate aligned to our plan,” he said. “More importantly, these signings are rapidly evolving into openings, resulting in our total network growing by 10% over the past 12 months.
“With the right business model, the right strategy, and the right people, we are superbly placed to benefit from the fundamental changes occurring in the workplace.”
Photo © IWG
