Regus (RGU) continued on its expansion track during the first half, growing its serviced office network by 14 per cent to 1,605 locations. These new centres incur heavy start-up costs, but a solid performance from mature centres drove healthy earnings growth. Adjusted operating profits rose by 22 per cent to £41.7m, after stripping out costs associated with the MWB Business Exchange acquisition.
Mature centres continued to improve their performance, with operating margins up to 14.6 per cent from 10.3 per cent in the first half of last year. The cash thrown off by these established centres allows investment in new centres as the company rides the growing trend for flexible working.
"We are in the right place at the right time; flexible working is greener, cheaper and it's what people want," says chief executive Mark Dixon. He believes operating margins can rise further as the company achieves greater economies of scale. Regus opened 203 new centres during the first half and remains on course to open at least 350 centres in 2013, with a longer-term target of 2,000 centres by the end of 2014.
Broker Panmure Gordon expects full year adjusted EPS of 8.5p (up from 7.5p in 2012), rising to 12.3p in 2014.
| REGUS (RGU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 187p | MARKET VALUE: | £1.8bn | |
| TOUCH: | 186.5p-187p | 12-MONTH HIGH: | 196p | LOW: 93p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 25 | |
| NET ASSET VALUE: | 55p* | NET DEBT: | 3% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 609 | 32.2 | 2.90 | 1.00 |
| 2013 | 745 | 31.1 | 2.80 | 1.10 |
| % change | +22 | -3 | -3 | +10 |
Ex-div: 4 Sep Payment: Oct *Includes intangible assets of £485m, or 51p a share | ||||
