Profits fall, but revenues rise at IWG

IWG, the serviced office group formally known as Regus, has revealed a 6% fall in gross profits for the first six months of its financial year. For the half year to 30 June, the group made £211.3m in gross profit, compared to £225.2m at the same point last year. Pre-tax profit performed slightly better, but was still down 4% on the same point last year at £80.8m. The drop in profits was despite a 8.5% increase in revenues to £1.169bn and a 9% reduction in overheads to £124.3m. Earnings per share were also down, by 4% to 6.9p, but the dividend per share leapt 13% to 1.75p. Net debt also rose significantly to £306.5m from £173.8m at the same point last year. During the six months IWG opened in 149 new locations, bringing its total to 2,996 centres, with 481.773 workstations. Mark Dixon, chief executive of IWG, said: “It is a very exciting time for our industry and, as market leader, we will continue to benefit from the structural growth in the Workspace-as-a-Service market globally. “As expected the improving trend in sales activity at the beginning of the year has led to a gradual improvement in revenue growth throughout the first half, with IWG returning to growth in Q2. Current sales activity remains robust and we are therefore confident that our mature business will see growth over the second half of 2017. “Given the gradual improvement in revenue growth, while continuing to control costs, we anticipate strong cash generation in the second half of the year. “These trends, together with the positive outlook for our industry, are reflected in our decision to increase the interim dividend by 13%, and maintain our progressive dividend policy.”