- First-half EBITDA in line
- Full-year guidance disappoints
- Buyback bumped up by $30 million
Shares in International Workplace Group (IWG), IWG for short, plunged 16% to 193.5p after the flexible office space provider warned annual profits will come in towards the lower end of previous guidance as the company invests to drive growth in its Managed and Franchise segment.
This news took the shine off otherwise solid first-half results from the serviced office specialist behind the Spaces and Regus brands, showing a rise in adjusted earnings and growth in recurring management fees.
IWG also increased its current year share buyback programme by another $30 million (£22.2 million) to ‘at least’ $130 million, demonstrating management’s increased confidence in the company’s cash flows and longer-term outlook.
GUIDANCE DISAPPOINTS
IWG, which also owns the HQ and Signature brands, now expects to deliver full-year EBITDA at the lower end of the $525 million to $565 million range, implying a miss versus the $540 million called for by consensus, while its free cash flow outlook of at least $140 million proved weaker than expected.
Results for the half ended 30 June 2025 revealed a 1% year-on-year decline in group fee revenues to $1.85 billion, slightly below consensus.
However, recurring management fee revenue was in growth and IWG delivered a 6% rise in adjusted EBITDA to $262 million, in line with consensus estimates. Moreover, EBITDA margins expanded to 14.2% thanks to growth in managed and franchise openings as well as the operational leverage in the business, with overheads flat.
WHAT DID THE CEO SAY?
CEO Mark Dixon said: ‘We set out a clear strategy at our investor day in December 2023 for capital light growth to deliver cashflow, and business simplification. We have been delivering against this strategy and will continue to do so.’
He added: ‘In the last six months, more locations were opened than in the entire first decade of our existence. We now have around 1 million rooms in 121 countries with a significant pipeline. This is expected to drive our future growth.’
