Shares dropped in IWG PLC on Tuesday after the group said it will keep dividend payments on ice due to a continued uncertain environment, despite posting a strong first half performance.

Shares in the flexible office space provider were 12% lower at 169.57 pence on Tuesday morning in London, the worst performer in the FTSE 250.

For the six months ended June 30, IWG reported a pretax loss of £70.2 million, narrowed from £163.3 million the same period a year before, on revenue which grew 25% year-on-year to £1.28 billion from £1.04 billion.

Despite the encouraging performance, the group said it would keep dividend payments on hold, due to the current macroeconomic climate and geopolitical tensions. However, IWG said it plans to return to its progressive dividend policy ‘at the earliest possible opportunity’.

IWG’s last interim dividend was in 2019 at 2.15 pence per share.

Looking ahead, IWG said it intends to prepare for a further increase in hybrid working, and is looking to expand the growth and coverage of its network to a strong state by the second half of 2022.

‘We have delivered strong revenue performance with record visibility of the forward order book with occupancy and pricing improvements. We continue to build resilience and cost efficiency into our business, and we have repeatedly demonstrated our ability to address new challenges. These attributes will be important as we continue to navigate the headwinds created by increased geopolitical tensions in Europe, general inflationary pressures, and the ebb and flow of Covid-related restrictions in some markets,’ said Chief Executive Mark Dixon.

‘Overall therefore, we look forward with cautious optimism to the remainder of 2022,’ Dixon added.

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