NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
FOR IMMEDIATE RELEASE
UPDATE ON TRADING AND GROWTH INVESTMENT PROGRAMME - 27 June 2018
IWG plc, the global operator of leading co-work and workspace companies, today issues an update on current trading and its investment programme.
Global sales activity trends are strong and these are converting into improvements in both occupancy and pricing in our mature estate and strong improvements in our newer estates. The real benefit of these improvements is expected to come through in the second half of the year. Notwithstanding this, our UK business is not performing to management expectations.
The continuing global growth in demand in our industry reinforces our desire to further strengthen our position within it. Therefore, pursuant to the Q1 trading update of 2 May 2018, we have accelerated our network growth. We now expect to add approximately 6.7m sq. ft. of new space, which represents an annual organic increase of approximately 45% and is over 17% higher than our previous guidance. We now anticipate adding 275 new locations to our network with an associated net growth investment of approximately £230m. Previous visibility was approximately £200m of net growth expenditure, equating to an additional 5.7m sq. ft. and 230 new locations.
Higher network growth brings additional short-term opening losses, along with incremental overhead costs to support the growth. Considering this, together with the current weak performance of our UK business, which is being addressed by local management, group operating profit for 2018 is now expected to be below management's previous expectations by approximately £15m to £20m. Nonetheless, we are confident that this additional growth investment will generate good returns in the future as we expand our global footprint and network to meet increasing demand.
Conference call details
IWG plc will be hosting a call for analysts and investors at 08.30 BST this morning. Details are set out below:
Dial in number: +44 (0) 2071 928000
Conference ID: 2747409
Encore replay is available from 11.30am on 27 June, until 11.30am on 3 July:
Dial in number: +44 (0) 33 3300 9785
Playback ID: 2747409
For further information, please contact:
IWG plc Mark Dixon, Chief Executive Dominik de Daniel, Chief Financial Officer & Chief Operating Officer Tim Regan, Company Secretary Wayne Gerry, Group Investor Relations Director |
Tel: + 41 (0) 41 723 2353 |
J.P. Morgan Cazenove (Lead Financial Adviser and Joint Corporate Broker) Alex Watkins James Robinson |
Tel: +44 (0) 20 7742 4000 |
Investec (Financial Adviser and Joint Corporate Broker) James Rudd Henry Reast |
Tel: +44 (0) 20 7597 5970 |
Brunswick Nick Cosgrove David Litterick |
Tel: +44 (0) 20 7404 5959 |
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Rule 26.1 disclosure
In accordance with Rule 26.1 of the Code, a copy of this announcement will be available at www.iwgplc.com, by no later than 12 noon (London time) on 28 June 2018. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.
MAR
The information contained within this announcement is considered by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No.596/2014 ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain.
The person responsible for arranging for the release of this announcement on behalf of the Company is Tim Regan, Company Secretary.
Disclaimer
J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the Prudential Regulation Authority (the "PRA") and regulated in the United Kingdom by the PRA and the Financial Conduct Authority. J.P. Morgan Cazenove is acting exclusively as financial adviser to IWG and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than IWG for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, or for providing advice in relation to the contents of this announcement or any other matter referred to herein.
Investec Bank plc, which is authorised by the PRA and regulated by the Financial Conduct Authority and the PRA, is acting exclusively for IWG and no one else in connection with the subject matter of this announcement and will not be responsible to anyone other than IWG for providing the protections afforded to clients of Investec Bank plc nor for giving advice in relation to the subject matter of this announcement.
This trading update contains certain forward looking statements with respect to the operations of IWG plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this announcement should be construed as a profit forecast. |
