IWG PLC on Tuesday reported revenue growth and improved occupancy in the first quarter of 2022 on strong momentum from 2021 that carried into this year.

However, the office space provider cautioned on headwinds from inflationary pressures.

Shares were down 5.8% at 239.10 pence each on Tuesday morning in London.

The Zug, Switzerland-headquartered firm said system-wide revenue grew 19% to £691.8 million in the quarter ended March 31, from £581.7 million in the comparable quarter a year before. The company noted that this was supported by increased franchising and partnering.

Total revenue increased 19% in the period to £613.7 million from £581.7 million.

IWG said it ended 2021 strongly and that momentum had carried forward into the first quarter of 2022.

It added that occupancy was improving. In the US, its largest market, occupancy continued to improve in the first quarter, ahead of the level achieved in the fourth quarter of 2021.

Retention rates in the first quarter were also ‘strong’ and slightly higher when compared to the previous quarter, IWG stated.

However, company noted that it is experiencing higher inflationary pressures across some of its cost categories that will represent a headwind during 2022.

Looking ahead, the workspace provider plans to monitor the uncertainty in selected key markets, for instance in China, ‘where lockdown restrictions have been reimposed or the return to more normalised market conditions has been slower than previously hoped.’

IWG believes it is well-positioned to capitalise on the strengthening structural tailwinds as more businesses embrace hybrid working.

‘We plan to meet this demand by increasing the growth and coverage of our network by furthering our capital-light development and our investment to drive the targeted growth,’ the company said.

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