IWG PLC on Tuesday said its first-quarter performance reflected the continued trend toward hybrid working, which favours flexible office space providers like IWG, although overall sales growth was only modest.
Shares in IWG were down 0.1% to 189.60 pence in London on Tuesday.
IWG, the Zug, Switzerland-based provider of rentable workspaces for companies and individuals, said system-wide revenue in the first quarter of 2024 rose 1.4% to $1.04 billion from $1.02 billion a year prior.
Group revenue was flat at $912 million compared with $911 million a year prior.
Chief Executive Mark Dixon said: ‘The first quarter of 2024 produced good year-on-year underlying revenue growth showing that the move to hybrid working continues. We are delivering on our plan to grow in a capital-light way, and the momentum in signings, and importantly openings, continues to accelerate.’
Company Owned & Leased revenue fell slightly to $799 million from $803 million, while Managed & Franchised revenue rose 12% to $139 million from $124 million. Worka revenue rose 3.2% to $97 million from $94 million. Worka is IWG’s digital services business.
In the Company-Owned & Leased division, IWG highlighted strong margin progression of 3.0 percentage points to 23.9% from 20.9% a year prior. Revenue per available room was little changed at $345 compared to $347.
In the Managed & Franchised business, IWG said it had 141,000 rooms open at the end of the quarter, with a pipeline of 138,000 rooms signed but not yet opened. Signings were up 37% year-over-year with 179 Managed & Franchised locations signed during the quarter. But revenue per available room fell 18% to $367 from $447 million.
At Worka, its IT and tech operations unit, IWG said revenue growth at the start of the year has been moderate with anticipated improvement as the year progresses.
‘We remain focused on improving the margin in Company Owned & Leased, growing fees in the Managed & Franchised business, and controlling overheads across the group,’ IWG said.
As a result, IWG said it was confident that both 2024 earnings before interest, tax, depreciation and amortisation and net financial debt will be in-line with management’s expectations which have not changed since the full-year results in March.
Capital allocation will continue as guided during December’s investor day, IWG said, with net debt reduction expected during the year as it progresses towards a target of 1 times net debt/Ebitda.
IWG said adopting US GAAP remains under evaluation, with a decision to be taken in the coming months.
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