REG - Workspace Grp PLC - Q4 TRADING UPDATE

WorkspaceAnnouncement

07/04/2022 07:00

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RNS Number : 5513H  Workspace Group PLC  07 April 2022

 

07 April 2022

 

Workspace GROUP PLC

 

STRONG FOURTH Quarter PERFORMANCE COMPLETEs year of recovery

 

Workspace Group, London's leading provider of flexible office space, provides
a trading update for the fourth quarter ending 31 March 2022.

 

Trading Highlights

 

·    Continued strong demand from SMEs demonstrates appeal of our flexible
offer, with an average of 957 enquiries per month (Q4 2020/21: 910) and 127
lettings per month (Q4 2020/21: 111) in the fourth quarter

·    Another quarter of strong growth in like-for-like occupancy, up 3.0%
in the quarter to 89.6%, and up 7.8% over the year, now reaching normalised
pre-Covid levels with scope for further growth

·    Further improvement in pricing with like-for-like rent per sq. ft. up
1.3% in the quarter to £36.39

·    Like-for-like rent roll up 4.0% in the quarter to £92.9m, with total
rent roll up 3.5% to £111.0m

·    Customer utilisation of our centres continues to improve, averaging
69% of pre-Covid levels in the week ending 1(st) April 2022, peaking at 73%
mid-week

 

Graham Clemett, Chief Executive Officer, Workspace Group PLC, commented:

 

"This is a fantastic end to a year of strong recovery, and we are going into
the new financial year with positive momentum across all key indicators. Our
strong performance in the fourth quarter demonstrates further evidence that
whilst SMEs have always appreciated flexible working, they also place enormous
value on working together in the right space where they can collaborate, be
creative and build distinctive cultures for their businesses. In this dynamic
SME market, the continued demand for our space across a broad range of
locations is translating into higher occupancy, higher utilisation and
improved pricing.

 

Despite the uncertain macroeconomic environment, it is clear that our offer is
resonating and our strategy is working. We are confident that we are well
positioned for further sustainable growth and see the recommended offer for
McKay Securities as an opportunity to accelerate these growth plans and
generate strong returns over the medium term."

Customer Activity

 

We saw continued strong levels of demand in the fourth quarter, with a monthly
average of 957 enquiries and good conversion to viewings and lettings.

 

 

            Monthly Average
            Q4        Q3        Q2        Q1        Q4

            2021/22   2021/22   2021/22   2021/22   2020/21

 Enquiries  957       831       935       947       910
 Viewings   634       513       629       615       413
 Lettings   127       117       138       125       111

 

Utilisation of business centres by our customers has increased in the quarter,
averaging 69% of pre-Covid levels in the week ending 1(st) April 2022, with
activity peaking at 73% of pre-Covid levels mid-week.

 

Occupancy and Rent Roll

 

Occupancy in our like-for-like portfolio has increased strongly, up by 3.0% in
the fourth quarter to 89.6%, and up 7.8% over the year as a whole.

 

We've also seen a further quarter of pricing growth, with like-for-like rent
per sq. ft. up by 1.3% from £35.92 to £36.39.

 

                                 Quarter Ended
                                 31 Mar 22  31 Dec 21  30 Sep 21  30 Jun 21

 Like-for-like occupancy         89.6%      86.6%      85.6%      82.9%
 Change*                         3.0%       1.0%       2.7%       1.1%

 Like-for-like rent per sq. ft.  £36.39     £35.92     £35.50     £35.41
 Change                          1.3%       1.2%       0.3%       (2.3)%

 Like-for-like rent roll         £92.9m     £89.3m     £87.3m     £84.6m
 Change                          4.0%       2.3%       3.2%       (1.1)%

 

*Absolute change

 

The combined impact of the growth in like-for-like occupancy and rise in rent
per sq. ft. in the quarter resulted in a 4.0% increase in like-for-like rent
roll, to £92.9m.

 

Total rent roll in the quarter increased by 3.5% to £111.0m, with overall
occupancy increasing by 2.1% in the quarter to 84.3%.

 

McKay Offer

 

On 2 March 2022, we announced a recommended offer to acquire McKay Securities
Plc for £272m at 297p per share. Workspace has received irrevocable
undertakings and a letter of intent in respect of 37% of McKay's issued share
capital as at 28 March 2022. Meetings of McKay shareholders to approve the
transaction are due to be held on 27 April 2022.

 

 

Disposal

 

On 7 March 2022, we exchanged and completed on the disposal of a light
industrial estate, Highway Business Park, for £23.7m at a significant premium
to the 30 September 2021 valuation of £11.6m.

 

Upcoming Events

 

We will be holding a live sustainability event for analysts and investors in
the afternoon of Tuesday, 10 May 2022, including a presentation, panel
discussion and Q&A. Venue details will follow shortly and a recording of
the event will be available on our website afterwards.

 

We report our full year results for the year to 31 March 2022 on Wednesday, 8
June 2022. There will be a live presentation for analysts and investors at the
London Stock Exchange, with webcast and conference call details available on
our website in due course.

 

 

- ENDS -

 

 

For further information, please contact:

 

Workspace Group PLC
 
 

Clare Marland, Head of Corporate
Communications
020 7369 2301

 

Finsbury Glover Hering
 
   020 7251 3801

Guy
Lamming
 

Chris Ryall
 

 

 

Notes to Editors

 

About Workspace Group PLC:

 

Established in 1987, and listed on the London Stock Exchange since 1993,
Workspace owns and manages some 4 million sq. ft. of business space in London.
We are home to London's brightest businesses, including fast growing and
established brands across a wide range of sectors. Workspace is geared towards
helping businesses perform at their very best. We provide inspiring, flexible
work spaces in dynamic London locations.

 

Workspace (WKP) is a FTSE 250 listed Real Estate Investment Trust (REIT) and a
member of the European Public Real Estate Association (EPRA).

 

Workspace® is a registered trademark of Workspace Group Plc, London, UK.

 

LEI: 2138003GUZRFIN3UT430

 

For more information on Workspace, please visit www.workspace.co.uk
(http://www.workspace.co.uk)

 

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