Shares in flexible office space provider IWG (IWG) fell 13.1% to 318.5p after the company warned on profit as new Covid variants hit office occupancy levels.
Underlying earnings before interest, taxes, depreciation and amortisation, or EBITDA, for 2021 are now expected to be 'well below' the level in 2020, the company said.
The overall improvement in occupancy was lower than previously anticipated as a result of the prolonged impact of Covid-19, including continuing lockdown restrictions and the emergence of new variants of the virus in some markets.
This would 'delay the anticipated recovery in our business and, given the operational gearing of the group, is expected to have a significant impact on the group's results for 2021,' it added.
HOPES FOR RECOVERY IN 2022
The company, which operates through the Regus brand among others, seems to be hinting that a rebound is just a question of timing. Expectations for a strong recovery in 2022 were broadly unchanged amid positive momentum in markets where Covid-19 related restrictions are easing, such as the US.
However, investors may be concerned about a longer-term structural shift in the way people work which could permanently depress office occupancy.
More positively for IWG, demand for flexibility may be boosted in a hybrid work from home and office-based environment.
FOR MORE ON IWG SEE HERE
