2nd May 2018 09:53
LONDON (Alliance News) - IWG PLC, formerly Regus PLC, on Wednesday reported marginal growth in first quarter revenue due to currency headwinds and said that trading for the remaining part of the year continues to improve amid improved sales activity towards the end of the period.
The office workspace provider record a 0.6% rise in reported revenue for the three months to March-end.
"Whilst we have seen the anticipated improvement in constant currency revenue, and believe this will gradually improve throughout the course of the year, the current weakness of some important trading currencies against sterling is continuing to provide a headwind for the translation of our results," the company said.
On a constant currency basis, IWG's group revenue rose 6.7% to GBP583.9 million from GBP580.7 million in the corresponding period last year.
The constant currency improvement was attributed to double-digit growth in Europe, Middle East and Africa division and high single-digit growth in the Americas and Asia Pacific. The UK division remained broadly flat during the period.
The Americas performance was driven by a strong performance in the US and a very strong performance in Canada. Accelerating revenue growth in Japan and a good recovery in Hong Kong and China delivered a strong performance in Asia Pacific.
IWG expects a modest increase in sales and marketing investment in 2018 to support its growth pipeline and network optimisation activity.
The company added 46 new locations in the quarter and closed 27, taking total locations to 3,144.
Underlying cash generation for the three months stood at GBP9.5 millon, a reduction of GBP23.7 million on the corresponding period in the prior year. The company had a net debt of GBP347.2 million at period end, up from GBP296.4 million at end of 2017.
Shares in the company were trading 3.2% lower at 236.305 pence Wednesday morning.
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