Shares in office space operator IWG (IWG) rallied almost 9% to 277p after seeing a pick-up in sales activity as it referenced rising interest in flexible working, though third quarter revenue was hit hard by the pandemic.
In a trading statement for the three months to 30 September, revenue fell 10.1% to £583.3 million year-on-year and revenue across its open centres decreased 5.5% at constant currency.
The company said good sales activity levels in July, August and September was offset by customer churn and the significant impact the pandemic had on service revenue, which historically accounts for approximately 28% of total revenue.
Mid double-digit declines were recorded across all regions except for EMEA which remained in positive territory as its performance continued to benefit from acquisitions completed in the second half of 2019.
The company said it had closed 33 locations in the third quarter, taking its worldwide network total to 3,359 locations.
FLEXIBLE WORKING DEMAND
But investors are seemingly looking to the future with IWG reporting increasing demand from corporates and a three-fold increase in conversations with large companies.
The company said, ‘There is clear evidence of increasing interest in flexible working as companies address how their employees will work in the future, the advent of further potential pandemics and the need to preserve liquidity by limiting capital and operating expense.
‘As a result, we are now starting to see some improvement in our sales activity.’
IWG also continued its strong cash performance, and having moved to a positive net cash position of £10.9 million as at 30 September, while it has liquidity headroom of £863.2 million. It is also on track to achieve targeted annualised cost savings of approximately £200 million.
