6th Aug 2019 09:17
(Alliance News) - Office space provider IWG PLC on Tuesday lifted its interim dividend payment and said that it will return GBP100 million via a new share repurchase programme, as profit inched higher.
The company, which trades under the Regus brand and other, intends to buy GBP100 million worth of shares by August 5, 2020. It raised its cash payout for the six months to June-end by 10% to 2.15 pence per share from 1.95p, saying it was confident in the long-term prospects of the business.
Shares were trading 0.3% lower at 360.50 pence each in London on Tuesday morning.
IWG, which is trying to franchise its operations across various geographies to accelerate growth, posted total pretax profit of GBP55.2 million for the first half, up 1.6% from GBP54.3 million in the comparative year-ago period.
Applying the IFRS 16 accounting standard, total pretax profit - including continuing and discontinued operations - stood at GBP53.4 million. The IFRS 16 rule introduces a single on-balance sheet accounting model for property leases.
First half revenue grew 10% to GBP1.30 billion from GBP1.16 billion a year ago.
"We have made excellent progress in franchising and partnering in the first half, which will help us grow more rapidly in this exciting market. Interest in partnering with IWG, the market leader, is high and we are in discussions with a number of prospective partners. We anticipate providing an update in the second half of the year," said Chief Executive Mark Dixon.
IWG in April agreed to sell its Japanese operations to TKP Corp for GBP320 million cash. It also agreed an exclusive master franchise agreement with TKP for the country.
"We look forward to the remainder of the year with confidence. Even in this period of global, political and economic uncertainty, we expect the positive momentum to continue in our business and this is reflected in the increased proposed dividend and GBP100 million share repurchase programme," Dixon added.
IWG, at the end of first half, operated 3,334 office locations worldwide.
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