IWG 'cautiously' optimistic after annual earnings jump

(Sharecast News) - International Workspace Group said it was "cautiously optimistic" on Tuesday, after it posted an uplift in annual sales and earnings. The flexible workspace provider - formerly called Regus - posted a 3.6% uplift in system-wide revenues to $4.45bn in the year to 31 December, the highest ever. System-wide revenues, IWG's preferred method, include revenues from franchises, managed centres and joint venture partners while excluding fee income.

Group revenues were largely unchanged, up just 0.2% at $3.76bn, while adjusted earnings before interest, tax, depreciation and amortisation rose 6% at $531m.

Mark Dixon, chief executive, said: "We continue to have structural tailwinds and a business which is both prepared for and delivering network growth.

"In the last 12 months, more locations were opened than we had open after 15 years of operating. We now have over 1m rooms in over 120 countries, with a significant pipeline. This is expected to drive our future growth in revenue, EBITDA and cash flow."

Looking to the current year, IWG said it was "cautiously optimistic" and reiterated guidance for annual adjusted EBITDA of between $585m and $625m and flagged a further $50m of share buybacks.

However, the stock came under pressure in morning trading, despite the in-line numbers, and by 1100 GMT had lost 6% at 199.5p.

Berenberg, which has a 'buy' rating on the stock, said the results "confirmed continued progress and a strong year of delivery in terms of its medium-term plan and capital-light transition.

"IWG remains well-positioned, with structural tailwinds and momentum across its network."