Regus H1 profit up 7% but warns of softening revenue growth

FTSE 250 workspace provider Regus reported a jump in first-half profit and revenue on Tuesday but warned of “softening revenue growth” in some of its markets.

In the six months to the end of June, pre-tax profit rose 7% to £84.3m on revenue of £1.08bm, up from £937m in 2015.

The company declared an interim dividend of 1.55p per share, up 11% from the first half of last year.

Chief executive officer Mark Dixon said: “We have traded in line with our expectations for the first half, delivering strong profit growth and cash generation. The returns profile of our business remains highly attractive, with investments performing at or above plan. We continue to invest where we see attractive opportunities that adhere to our strict financial criteria and currently have visibility on net growth capital expenditure totalling £120m for the whole of 2016, representing approximately 350 locations.

“As global macro-economic uncertainty has clearly increased during 2016 and we have seen softening in revenue growth in some markets on the back of that, we have planned prudently for 2016 and taken specific action early in the year to improve efficiencies across the business. We are confident in the long-term structural drivers of the industry and that Regus, as global market leader with a highly diversified business, will continue to strengthen its position through its resilient and cost efficient operating model, strong cash generation and balance sheet.”

The company said it remains confident of delivering a full year profit performance in line with management's expectations.

At 1015 BST, Regus shares were down 3.4% to 307.79p.