IWG upbeat as quarterly revenue rises

7th Nov 2023 09:45

(Sharecast News) - Workspace provider IWG reported a third-quarter system revenue of £830m on Tuesday, reflecting 8% year-on-year growth in constant currency terms.

The FTSE 250 company, which counts the Regus and Spaces brands among its operations, said the steady revenue growth underscored its resilience and ability to adapt to evolving workspace needs.

A notable highlight from the period was the acceleration of IWG's capital-light centre expansion strategy.

During the quarter, it signed 200 agreements for capital-light centres, bringing the total for the year to 582.

That figure represented a nearly 40% increase compared to the total signings for the entire year of 2022.

Additionally, a significant number of previously signed agreements progressed to openings, with 99 centres opened in the third quarter, compared to 32 in the same period a year earlier.

That trend was expected to continue, further bolstering fee income for the company.

IWG said its financial stability remains robust, with a reduction of £24m in net financial debt during the quarter, bringing the total to £634m.

That debt reduction was attributed to strong revenue performance and disciplined cost management, resulting in positive cash generation.

Despite the evolving global landscape, IWG said its financial outlook remained unchanged from the statement issued alongside its first-half results in early August.

"The structural growth in hybrid working, combined with our market position, has resulted in continued revenue momentum in the third quarter of 2023," said chief executive officer Mark Dixon.

"Our capital-light growth strategy is continuing to deliver with around 40% more locations already signed in 2023 than in the whole of 2022.

"Our revenue growth and cost control are driving cash flow enabling us to continue to pay down debt."

At 0932 GMT, shares in IWG were up 0.22% at 138.8p.

Reporting by Josh White for Sharecast.com.