IWG’s revenue falls but optimism rises

IWG’s quarterly revenue has dropped by more than £20m over the year as it claims opportunities “have never been greater”. According to a trading update from the workspace group, system-wide revenue for Q3 was £620.7m, down from £642.7m in Q3 2020. Group revenue was £550.8m, down from £571.8m. System-wide revenue for the year to date was £1.8bn, down from just over £2bn last year. Occupancy nudged up on the quarter from 70.1% to 71.2%, but was down on the previous year to date from 73.6% to 69.4%. The company has also lost a net 51 premises over the year, with 3,308 locations remaining on the books, totalling 63.7m sq ft. In the nine months ended 30 September 2021, the group has added 109 new locations with 114 closures in less profitable locations. The Mark Dixon-led company currently has debt of £412m, down from £414m last quarter, but a far cry from its Q3 2020 position of holding £11m in cash. The Regus brand owner said its “pivot towards capital-light growth” through management agreements, franchising and joint ventures “is delivering”, allowing IWG to “open more centres, at greater speed and with less capital”. It added that “the pipeline of new opportunities remains attractive with market disruption bringing many new deals”. IWG has signed franchising deals for 102 new locations over the quarter, with a total of 162 locations committed for the year to date. It now has committed development plans for 814 locations, of which 320 are open. The total net cash investment in growth in the nine months to 30 September was £141.5m, including £78.3m construction costs. IWG said it had also undertaken a preliminary review to look at separating the digital and technology assets from the group and creating a separate business. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Photo © IWG