IWG, the owner of Regus serviced offices, saw its revenues reach a record £3.34billion last year, as it benefited from the increasing popularity of hybrid work.
Mark Dixon, IWG’s CEO and founder, stated that more people are returning to their office, “but it is not necessarily the headquarters”, that they work from.
IWG instead reported a growing demand for its locations located outside of large city centres, nearer to where people lived. It said that this was not just an UK trend but a global phenomenon.
Dixon, 64, stated that “offices are great places to work but they must be convenient.” “People don’t like to travel long distances at their expense. It’s not dead. It’s just been moved.
Dixon founded IWG in 1989, when he opened the first office of his company in Brussels. IWG, in response to the growing popularity of hybrid working and the trend towards smaller offices with more flexible leases, has attempted to capitalize on this. It wants to be a one-stop shop to help other landlords navigate the changing market, rather than purchasing or leasing office space.
Dixon stated that “Building Owners now acknowledge hybrid working as here to stay.” “Investing in hybrid space is a great way to increase your return on investment.” We’re getting a lot of them and opening a lot more.
IWG will open 37,000 “rooms” in 2023 — the equivalent of small offices — using this “capital-light” model. This is where landlords give space to IWG for serviced offices. This was more than twice what IWG had opened the year before, and there are more to come: 115,000 signed rooms have not yet been opened. Most of the new signings are in smaller towns and suburbs “where people live”.
Dixon stated that IWG also took over about 50 buildings that were vacated from WeWork its bankruptcy American rival . The group manages over 3,500 centers, which is equivalent to 895,00 rooms in 120 countries.
IWG generated a revenue of £3.34 billion in 2022, an 8 percent increase over the £3.09 million it generated in 2020.
This was despite a “difficult economy”. Dixon stated that when the economy is tough, businesses are more likely to utilize IWG’s office space. It’s a challenging macro-background, but this is causing businesses to focus on cost management. We can help companies halve costs. That’s a very attractive proposition.
The company’s losses before taxes increased to £189m last year from £105m in 2022. After removing a number one-off charges including a £30,000,000 writedown on landline telephones the underlying earnings increased by a third, to £403 Million versus £311 Million in 2022.
IWG halted the dividend payment during pandemic, as employees, who were forced to stay home due to lockdown regulations, abandoned its offices. The dividend is now reinstated and shareholders will receive 1p for each share on May 31.
IWG shares fell again in trading on Tuesday, falling 5 1/2p or 2.9 percent to 179 1/2p. The group stated that they “remain cautious” in their outlook but “efficiencies and cost controls” should allow them to meet the forecasts for 2024. Let’s say it this way: “We are cautiously confident.” Dixon stated that the world was a volatile environment.