IWG Lifts Dividend 12% Amid Higher 2017 Revenue But Lower Profit

6th Mar 2018 09:09

LONDON (Alliance News) - IWG PLC raised its annual payout on Tuesday, after it saw a slight drop in profit despite a rise in revenue in 2017.

The FTSE 250-listed service office company that trades mostly as Regus reported a 14% drop in pretax profit to GBP149.4 million in 2017 from GBP173.7 million the year before, due to a substantial narrowing in the group's gross margin to 17.1% from 20.1%, lower profit in its Mature business, and higher losses from new openings.

Revenue for the year rose to GBP2.35 billion, up 5.3% from GBP2.33 billion the prior year, representing a 1.9% increase in constant currency. Growth was mostly driven by an acceleration of revenue growth from open office centres, meaning excluding closed centres, in the second half of the year.

IWG declared a dividend for the year of 5.70 pence, up 12% from 5.10p the year before.

"2017 was an important year for the flexible workspace industry globally, and we remain confident that IWG will continue to drive, and benefit from, the accelerating customer demand and growth of flexible working. With the competitive advantage from our operational scale, global network and quality of service and technology, we are optimally positioned to benefit from these long-term structural growth drivers," said Chief Executive Mark Dixon.

"Our group strategy remains unchanged. We will continue to invest in our network so we can deliver future earnings growth and increasing shareholder returns. We will continue to focus on partnerships to drive capital efficiency and to grow and interlink our multi-brand national networks to enable more deals with larger corporates. Alongside investing for growth, we will focus on delivering attractive returns on the investments we have made in recent years and monetising our leading network," Dixon added.

Shares in IWG were down 4.8% at 228.60 pence on Tuesday.

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