IWG revenue growth driven by strong European performance

The office space provider's revenue increased 10.6% at constant currency over the three months ended 31 March as revenue growth across the business' open centres increased by 15.1%, driven by a "particularly pleasing" performance in large European countries including France, Germany and Spain.

At actual rates, first quarter revenue increased by 12.7%, reflecting currency tailwinds from the US dollar and some currencies in Asia Pacific.

During the quarter, IWG added 55 new locations to its global network, with net growth capital investment of £43.3m, down from the £63.4m net investment for 46 new locations in the same quarter last year, as growth-related partner contributions more-than doubled to £56.7m.

A statement from IWG said: "We want to significantly accelerate this growth by complementing our traditional group-owned growth with an increasing focus on partnering and franchising, as evidenced by the strategic partnership we recently agreed with TKP for our business in Japan, which is expected to complete later this month. This is an important aspect of our strategy to deliver capital efficient growth in our global network."

The partnership agreement, which saw IWG receive a gross consideration of approximately £320m as TKP gained exclusive rights to use IWG's brands in Japan, could be the first of many as the FTSE 250-traded company said it was enjoying "strong momentum" with the strategy with interested candidates keen on bringing the brand to "a wide geographic spectrum".

Finally, IWG added that it had net debt of £534.1m at the end of the quarter, up from £460.8m at 31 December, though the company will receive the gross proceeds of £320m from its Japanese activities later this month.

IWG's shares were down 0.35% at 338.72p at 0804 BST.