International Workplace Group (IWG)

LONDON (ShareCast) - (Sharecast News) - Shares in International Workplace Group rallied on Tuesday, after the Regus-owner posted a jump in third-quarter earnings and struck a confident tone for the rest of the year.
The flexible workspace provider, which has a portfolio of managed, franchised and company-owned offices, said system-wide revenues rose 12% in the three months to September end to $1.26bn, while group revenues improved 9% to $1.03bn.

In company-owned properties, revenue per available room was 2% higher at $388, while fee revenues in the managed and franchised division spiked 28% to $45m.

Christian Schmitz, chief executive, said IWG was benefiting from the ongoing popularity of flexible working as well as wider macroeconomic uncertainty, which had seen nervous clients opting for temporary rather than permanent office space.

He continued: "We have reached two significant milestones: our global network now exceeds 5,000 centres and quarterly system-wide revenue has reached $1.26bn, representing over $5bn on an annualised run-rate basis."

Looking ahead to the rest of the year, IWG left its guidance unchanged but tightened its forecast range. It now expects adjusted earnings before interest, tax, depreciation and amortisation to be in the range of $585m and $625m, "with the expectation to trade above current consensus of $599m". It also pointed to company-owned revenue growth of at least 4%, and recurring managed fee revenue of $80m.

As at 1330 GMT, the London-listed stock had put on 8% at 212.6p.

Dan Coatsworth, head of markets at AJ Bell, said: "IWG provided a healthy dollop of reassurance with its trading update. The strategic shift towards managed and franchise partnerships, which allow the business to grow without a significant capital burden, is paying off. Robust utilisation rates and higher RevPAR demonstrate that the flexibility offered by the company's solutions are still in demand with businesses."

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