IWG shares plummeted 10.4% to 172.8p in late morning trading on Tuesday, after the group missed an expected return to profit with a reported post-tax loss of £81.3 million in HY1 2022 against £173 million in HY1 2021.
IWG announced an adjusted operating loss of £2.2 million from £31.8 million, alongside an adjusted pre-tax loss of £70.2 million compared to £163.3 million.
The group noted an adjusted EBITDA of £565.6 million from £528.6 million year-on-year.
However, the company confirmed a 22.3% system-wide revenue growth to £1.4 billion against £1.1 million, driven by strong demand for hybrid working.
“IWG’s latest results indicate progress in the business, with improvements in both occupancy rates and pricing,” said AJ Bell financial analyst Danni Hewson.
“Unfortunately, it cannot escape the cost pressures hurting companies worldwide. Neither can it be relaxed about Covid as certain markets continue to experience lockdowns, which has a negative impact on demand for some of its serviced offices.”
“Before the numbers came out, analysts had forecast IWG returning to profit this year at £48.6 million. Given the ongoing cost pressures and lockdown disruptions, it seems likely this estimate will have to be scaled back.”
IWG mentioned a net debt of £7.1 billion compared to £6.7 billion the last year.
The firm reported an adjusted loss per share of 11.6p against 11.7p the year before.
“We have delivered strong revenue performance with record visibility of the forward order book with occupancy and pricing improvements,” said IWG CEO Mark Dixon.
“We continue to build resilience and cost efficiency into our business, and we have repeatedly demonstrated our ability to address new challenges.”
“These attributes will be important as we continue to navigate the headwinds created by increased geopolitical tensions in Europe, general inflationary pressures, and the ebb and flow of COVID-related restrictions in some markets.”
IWG declined to resume its dividend payouts, and said it was focused on maintaining sufficient company funding due to market volatility.
