UK's IWG retains annual, medium-term forecasts on cost-cut boost
UK's IWG retains annual, medium-term forecasts on cost-cut boost Aug 11 (Reuters) - British office-space provider International Workplace Group IWG.L said on Tuesday cost-cuts would boost results in the second half of the year and beyond, helping it reiterate its 2026 and medium-term outlook despite macroeconomic uncertainty.
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IWG, which owns the Spaces and Regus brands, has been tackling higher debt and costs in the wake of the Middle East conflict and workplace changes linked to AI.
The company maintained its 2026 outlook of adjusted core profit between $585 million and $625 million, amid accelerating centre signings and rising customer enquiries.
IWG also said that it expects overheads to reduce significantly in the second half after cash flow before corporate activities stood at negative $55 million in the first half.
The company's adjusted first-half core profit edged up 1% to $265 million while system-wide revenue increased 11% to a record $2.4 billion.
"Despite guidance for 2H FCF to be ahead of last year's reported numbers, we expect FY FCF expectations to fall significantly, which we expect to be the focus today and a headwind for the shares," Jefferies analysts said in a note.
They added that this could also reduce confidence in the timing of further share buybacks by IWG.
In June, IWG increased its share buyback programme by $50 million, taking the total to $150 million.
(Reporting by Neeshita Beura in Bengaluru; Editing by Janane Venkatraman and Mrigank Dhaniwala)
((Neeshita.Beura@thomsonreuters.com))