19th Aug 2025 08:54
(Alliance News) - Shares in International Workplace Group PLC plunged on Tuesday after it warned annual adjusted earnings would be towards the bottom end of guidance.
The Zug, Switzerland-based provider of hybrid workspace expects adjusted earning before interest, tax, depreciation and amortisation at the low-end of the USD525 million to USD565 million guidance range, due to further investment in Managed and Franchise segment growth.
In 2024, IWG, which operates across 121 countries and owns brands such Regus and Spaces, reported adjusted Ebitda of USD557 million, itself growth of 11% from USD503 million in 2023.
IWG said it remains on track to deliver its medium-term target for at least USD1 billion Ebitda.
In response, shares in IWG slumped 16% to 191.80 pence each in London on Tuesday morning.
In the half year, IWG said it invested USD15 million in the partnership sales team in its Managed & Franchised division to accelerate the development of its pipeline. It said 413 new locations were signed in the first half of the year, up 6.7% from 387 a year ago.
Chief Executive Mark Dixon said IWG had opened more locations in the last six months than in the entire first decade of its existence.
"We now have around 1 million rooms in 121 countries with a significant pipeline. This is expected to drive our future growth," he said.
Pretax profit plummeted 63% to USD12 million for the six months ended June 30, down from USD32 million a year ago.
System-wide revenue however rose 1.9% to a record USD2.16 billion from USD2.12 billion, while group revenue decreased 1.1% to USD1.85 billion from USD1.87 billion.
IWG said: "In particular, small towns have seen a dramatic increase in new locations with recent signings in the US including Franklin, Texas, Berwyn, Pennsylvania, and Bloomfield Hills, Michigan, all with populations below 5,000."
Adjusted earnings before interest, tax, depreciation and amortisation rose 6.1% to USD262 million from USD247 million, and cashflow rose 33% to USD48 million from USD36 million.
For 2025, International Workplace expects cashflow to rise to at least USD140 million, and said it has increased the share buyback programme amount to at least USD130 million from USD100 million.
The company also declared an interim dividend of 0.45 US cents per share, up 4.7% from 0.43 cents a year prior.
In its Managed & Franchised business, IWG said it had 220,000 rooms open at the end of the first half, with a further 186,000 rooms that were signed not yet open.
"Once these rooms are all open and mature, they are expected to produce system-wide revenue of USD1.4 billion per year," IWG said.
CEO Dixon said growth is being fuelled by the widespread uptake of platform and hybrid working, "propelling our business forward with the fastest growth that we have ever seen in history."
By Jeremy Cutler, Alliance News reporter
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