IWG PLC (LON:IWG) have given shareholders a strong update on Tuesday, which has given shares a boost.
The office space provider noted that it had also increased its share buyback program to £100 million following the rise in profits.
The FTSE 250 listed firm added that pretax profit had tripled across 2019 to £430.1 million from £138.7 million in 2018.
Revenue also surged 10% to £2.65 billion from £2.4 billion, however on a constant currency basis revenue increased slightly lower at 9.2%.
IWG noted that its pretax profit figures did include profit from the signing of master franchise agreements during the year, however these have been reported under discontinued operations.
Looking at pretax profit from existing operations, this measure slipped to £55.9 million from £109.6 million – the firm said that this was due to changes in accounting standards.
Notably, without the change to IFRS16 – IWG said that pretax profit rose by 9% year on year.
Following the confidence results, IWG lifted its final dividend by 10% to 4.8p – giving an annual payout of 6.95p.
Mark Dixon, Chief Executive commented: “2019 has been a transformational year for IWG. We made significant progress in our pivot towards becoming a franchised organisation and delivered strong revenue growth and record profits. We continue to see strong demand globally and to welcome more great partners to the business. As organisations increasingly seek ways to address the challenges of climate change, we believe that more and more are recognising the role to be played by remote, distributed and flexible working strategies.
The outbreak of COVID-19 has led to brief closures of our centres in China and we are closely reviewing the ongoing developments worldwide. Whilst we cannot be certain how long this situation will last; we continue to monitor the situation and will act swiftly where necessary to help ensure the safety and wellbeing of our customers and employees. We are extremely grateful for the incredible effort of our teams in dealing with this global health emergency.
We will continue to work closely with our partners, develop our network and invest in our people, our brands and our services, to ensure that we remain the leading player in our industry. Even in this period of global, political and economic uncertainty, we are confident that the Group will continue to deliver strong returns for all our stakeholders, and this is reflected in the increased proposed dividend and new £100m share repurchase programme.”
IWG continue to expand
In November, IWG reported revenue gains after opportunities for business expansion in its franchise department came to bloom.
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.
The FTSE 250 listed firm also reduced debt to £301.2 million from £433.9 million, which capped a strong update for IWG.
Shares in IWG trade at 353p (+2.27%). 3/3/20 13:16BST.