The City finally had something to cheer about today as office rental provider Regus (RGU) hit earnings expectations and helped the FTSE 350 higher after 10 straight days of losses.
Half-year results at Luxembourg-headquartered Regus showed improving returns on investment as its office estate begins to mature.
Overall cash return on investment was 20.6% on a trailing 12 month basis, up from 18% in the prior period.
‘The flexible work market continues to experience robust growth and we remain ideally placed to benefit from these trends by providing more customers with the right environment to succeed,’ says chief executive officer (CEO) Mark Dixon.
It takes around three years for a newly-opened serviced office to become profitable, so Regus tracks post-tax cash return on investment for offices open four years or more, and also an aggregate measure across its entire estate.
Returns on offices opened in 2011 or earlier was 23.1%, up from 20.9%. For the entire estate, the number was 20.6% up from 18%.
CEO Dixon sold £73.5 million of stock earlier this year at a price of 245p, though he still owns 31.4% of Regus, which has a market capitalisation of £2.5 billion.