Regus (RGU) delivered a wholly positive set of returns for a year in which it increased the size of its network by a fifth. The workspace provider added another 554 locations in 2015, yet its net debt to cash profits ratio stands at an easily manageable 0.66.
Revenues and cash flows bounded along, prompting a double-digit hike in the dividend rate, while underlying operating profits were up 37 per cent, at constant currencies, to £145m. But given the risk inherent in a period of rapid expansion, perhaps the most telling metric was the 23.1 per cent post-tax return on capital.
It's often difficult to keep a lid on costs during an expansionary phase, yet Regus has continued to drive down overheads as a percentage of revenues. Gross margins were ahead across the group's pre-existing locations, while the initial performance of the sites rolled out through 2015 was in line with expectations. Earnings contributions were up across all the group's geographic divisions.
Investec expects adjusted pre-tax profits of £169m and EPS of 14.2p in 2016, against £130m and 11p in 2015.
| REGUS (RGU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 293.4p | MARKET VALUE: | £2.73bn | |
| TOUCH: | 293.4-294.6p | 12M HIGH / LOW: | 357p | 215p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 63p* | NET DEBT: | 33% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 1.16 | 49.4 | 4.3 | 2.9 |
| 2012 | 1.24 | 85.1 | 7.5 | 3.2 |
| 2013 | 1.53 | 81.5 | 7.1 | 3.6 |
| 2014 | 1.68 | 87.1 | 7.4 | 4.0 |
| 2015 | 1.93 | 146 | 12.8 | 4.5 |
| % change | +15 | +67 | +73 | +13 |
Ex-div: 28 Apr Payment: 27 May *Includes intangible assets of £666m, or 72p a share. | ||||
