IWG reports strong demand after first-half loss

IWG said demand was strong as the flexible office group swung to a first-half loss after the Covid-19 crisis hit trading early in the period.

The FTSE 250 company swung to a £30.2m adjusted operating loss in the first six months of 2021 from a £43.3m profit a year earlier as revenue fell 15.3% to £1.07bn. Including adjusting items the loss narrowed to £79.8m from £98.2m.

IWG said the first quarter of 2021 was the most challenging it had faced as many markets entered strict Covid-19 lockdowns. Occupancy fell to 68.4% from 75.3% a year earlier but has improved since March, IWG said.

The company cut £190m of costs in the first half and is on track to reduce costs by £320m.

IWG said the move to hybrid working had created "unprecedented demand" for its services and that it was seeing increased interest levels from businesses wanting to change their working practices. As a result the company has tightened discounts offered to customers and removed Covid-19 promotions.

Mark Dixon, IWG's chief executive, said: "Whilst the pace of recovery remains dependent on the continuing easing of pandemic restrictions across our markets, we look forward to the second half with cautious optimism having implemented the necessary changes to our network and cost base. Looking further ahead, with the improvements we are observing in our operating environment, we remain confident of a stronger recovery in 2022."

IWG shares rose 1.3% to 323.5p at 08:52 BST.