IWG PLC (LON: IWG) have reported revenue gains after opportunities for business expansion in its franchise department came to bloom.
The office space provider built momentum with its expansion plans and international franchise business, after a period of volatility in share price and a bid from Terra Firma (CVE: TII).
IWG reported a 9.4% increase in revenue to £692.3m in the three months to 30 September, driven by the Europe, Middle East and Africa (EMEA) and US markets.
This comes after the news that IWG had sold its Swiss business in a £94 million deal, to a joint entity owned by private banking group J. Safra Group and real estate investor P. Peress Group.
During the third quarter, IWG reported that company added 66 new organic locations to its network with net growth capital investment of £64.4 million.
“Where it makes strategic sense, we are ready to use our strong financial position to undertake such activity,” the company said.
IWG said: “We remain very confident in the structural, long-term growth in the flexible workspace market and IWG’s leading position within it, which we continue to extend. “
IWG added “We believe our transition to a franchising model by partnering with a growing and diverse range of third parties will deliver a quicker and more asset light approach to growth, which benefits all stakeholders”
“We are making excellent progress in shaping the business to benefit from this significant growth opportunity. We continue to invest in our leading global platform and management to support our strategy and look forward to the rest of the year with confidence.”
Additionally, IWG boss Mark Dixon set an example to the industry about WeWork’s hectic year warning other businesses about potential problems.
Dixon said: “There is a possibility some WeWork tenants could be concerned about the headlines and worried about potential disruption to their businesses.”
The FTSE 250 (INDEXFTSE: MCX) firm reduced debt to £301.2 million from £433.9 million.
Shares of IWG are trading at 396p per share. 5/11/19 14:05BST.