There are plenty of positives to be found in the latest numbers from flexible workspace provider Regus (RGU). Revenue grew by more than 10 per cent at constant currency, post-tax cash returns on investment grew 180 basis points to 24.8 per cent - a level well above the cost of capital - and underlying operating profit is up 30 per cent to £90m.
So why did the share price fall briefly following this result announcement? The answer, it seems, is in the detail. Revenue growth at constant currency slowed from 14.5 per cent in the first quarter to 6.4 per cent in the second, reflecting not just a like-for-like adjustment for acquisitions, but also softening demand and the group's decision to take a more cautious approach regarding lease renewals and site consolidation in certain markets. Margins have held up for newer openings, which is encouraging given that management took the short-term decision to lower prices in an attempt to build occupancy levels.