IWG cuts costs as recovery is delayed

Workspace operator IWG has said it is undertaking “additional network rationalisation” with a £160m provision, as it expects its recovery in 2021 to be delayed. IWG said it has identified “further prudent action” to reduce costs in a network rationalisation drive “similar in magnitude” to its office closure plans last year. A provision of up to £160m will be taken in addition to net charges of £155.8m directly related to the Covid-19 impact it identified in its interim results on 4 August last year. IWG said it expected the cost benefit from these combined actions to total between £325m and £375m. Group revenue for the year ending 31 December is expected to total £2.45bn. The group’s debt pile is expected to tally around £350m, after it made a “bolt-on acquisition in the US and invested in several long-term investment opportunities”. IWG said it has maintained a “strong financial position” with liquidity headroom in excess of £800m at the end of December last year. The company highlighted that conversations have “restarted on several master franchise agreements”. “Therefore, whilst current market conditions remain very challenging, the future of flexible and hybrid working looks very positive.” it said. Its full-year results will be published on 9 March. To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette