Regus posts rise in Q1 revenue, confident over full year

Regus, a provider of flexible workspace solutions, said it expects to deliver full-year results in line with management's views as it reported “good trading” in the three months to the end of March.

The FTSE 250 company said group revenue rose to £532.5m from £452.3m in the first quarter of last year, a 14.5% increase at constant currency, thanks to the development of 554 locations added during 2015.

Regus said underlying cash generation was strong, more than doubling to £56.4m from £25.2m in the first quarter of 2015, reflecting the good trading performance and improved working capital management.

Year-on-year, mature occupancy for the three months to the end of March rose 1.6 percentage points on a like-for-like basis to 79.1%, reflecting the maturation of the 2014 additions where occupancy has grown strongly as expected.

After investing a total of £39.5m in growth in the quarter, net debt at 31 March 2016 fell to £183.0m from £190.6m at the 2015 year end. The company said this was a strong performance in what is normally its weakest quarter for cash generation and demonstrates that it has “maintained a prudent balance sheet”.

“Whilst we are vigilant about the overall macroeconomic environment, we remain confident in delivering a full year result in line with management's expectations given the benefits from our new field and management structure and current trading performance,” the group said.

Regus said it remains focused on building long-term shareholder value through delivering attractive returns from its existing business and continuing with the disciplined investment in new locations.

In the first quarter, it added 42 new locations to its global network. These represented over 0.5m sq ft of space added to the network, which now totals more than 46m sq ft globally.