IWG reports record first-half revenue

International Workplace Group reported record first-half financial results on Tuesday, driven by a strategic network expansion across its brands including Regus and Spaces.

The FTSE 250 company achieved its highest-ever system-wide revenue of $2.1bn, marking a 2% growth at constant currency.

EBITDA rose 13% to $274m for the six months ended 30 June, compared to $245m in the same period last year.

IWG said strong cash flow generation of $118m from business activities led to a significant reduction in net debt, which now stood at $768m, down from $835m in the first half of 2023.

The company also returned to positive earnings, posting earnings per share of 1.6 cents, supporting an interim dividend of 0.43 cents per share.

It said its performance was bolstered by growth across its divisions, with the managed and franchised division seeing a significant increase in new centre signings and openings, and fee income evolving as expected.

The company-owned and leased division continued to expand its margins, while Worka maintained its revenue as previously guided.

IWG also achieved a milestone in capital structure with the refinancing of its debt, extending maturities to 2029-2030.

The company issued its inaugural bond, backed by an investment-grade Fitch BBB credit rating.

Looking ahead, IWG said it remained focussed on improving margins in its company-owned and leased division, growing fees in the managed and franchised business, and controlling overheads across the group.

The company said it expected continued growth and further net debt reduction throughout 2024, in line with management expectations set out in its first quarter trading update.

Capital allocation would prioritise debt reduction, with a target of achieving a net financial debt-to-EBITDA ratio of 1.0x.

“The first half of 2024 produced good year-on-year open-centre revenue growth,” said chief executive officer Mark Dixon.

“We are delivering on our capital-light growth plan; momentum continues in signings, and importantly openings, and we are delighted to return to positive earnings.

“We remain committed to our strategy of growing our network coverage and giving our customers a great day at work.”

At 1040 BST, shares in International Workplace Group were up 6.14% at 169.2p.

Reporting by Josh White for Sharecast.com.