IWG Group, formerly known as Regus, have posted a soggy set of trading figures that show demand for their suite of office and remote working solutions isn’t as strong as they may like.
Revenue for the first nine month of the year was £1,798.2 million, down from £2,094.0 million in the same period a year prior. However, revenue for their open centres rose in the last quarter.
The first quarter of 2021 was heavily hit by UK lockdowns, but even as restrictions were removed, IWG hasn’t seen this reflected in their revenue figures to the extent you may expect.
Although open centre revenue rose 5.2% in the last quarter, investors choose to focus on the mixed outlook and implications of the strategic revenue. Shares were some 0.6% weaker in early trade on Tuesday having given up early gains.
A statement provided in the groups release guiding on future outlook for the business highlighted how the new normal for remote working and hybrid working would cause the group uncertainty.
“The rapid adoption of hybrid working, both for enterprises and smaller businesses, is increasing the demand for the Group’s services and improving performance in all major markets. This seismic change in how businesses and employees plan their work is, we believe, significant, irreversible and transformational for our business,” IWG said in a release.
“Although we remain suitably cautious during this period of heightened macro-economic uncertainty, the occupancy and pricing run-rate achieved in the third quarter and in September in particular, underpin our confidence in delivering results for 2021 in line with management’s expectations. Similarly, the acceleration of trading, together with a growing forward order book and ongoing cost reduction, set the direction for a stronger recovery in 2022.”
IWG Group highlight they are a market leader with location numbering four times of their closest peer, but the reality is competition is increasing dramatically and shifts in working habits raise questions about IWG Group’s growth prospects in the future.