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IWG chief exec goes on shopping spree

The co-working and office space provider is likely to see tougher times ahead as more people work remotely and business conditions deteriorate
March 25, 2020

As the Covid-19 pandemic continues, more offices around the world are closing their doors and sending workers home. This rise in remote working poses a not insignificant threat to co-working space providers like IWG (IWG) and rival WeWork. This is on top of cyclical pressures as the world heads into recession territory.

IC TIP: Sell at 164p

At the time of the full-year results in March, IWG revealed that some of its centres in China had closed in response to the outbreak. While they have now reopened, the group anticipates pressure across its global business as more countries instigate lockdowns. In order to preserve cash flows, capital expenditure is being curbed and the final 4.8p dividend payment declared for 2019 has been scrapped. Meanwhile, its £100m share buyback programmed has been suspended.

While it's true that net debt, excluding lease liabilities, came in over a third lower in 2019 at £294m, those lease liabilities add up to a whopping £6.5bn – a major concern in an economic downturn. During tougher times, demand for office space falls but IWG is still on the hook for the rent it owes to landlords. The shift towards an asset-light franchising model is promising. But according to Berenberg, revenue from franchises is less than 1 per cent of the group total.

The wider market may be engaged in a panicked sell-off, but chief executive Mark Dixon has engaged in a buying frenzy. Between 16-19 March, he purchased just over 4m shares for around £5.5m across multiple trading exchanges. These were done via his wholly owned holding company, Estorn Limited. Perhaps buoyed by his display of confidence, other investors have followed suit and the shares are now trading above the weighted average price of his transactions, at 164p.

Buys      
CompanyDirector/PDMRDateNo. of sharesPrice (p)Aggregate value (£)Comments
Lloyds Banking GroupLord Lupton16 Mar 20250,00033.283,000 
IWGMark Dixon (ceo)17 Mar 20241,924144.65349,94328.2% position
Wizz AirWilliam Franke (ch)17 Mar 2030,0002,355706,500 
IWGMark Dixon (ceo)18 Mar 201,600,000115.21,843,200

Weighted average price

CineworldEric Senat18 Mar 20423,41023.599,501 
CineworldAnthony Bloom (ch)18 Mar 20839,704276.49232,173PCA
EMIS GroupAndrew Thorburn (ceo)18 Mar 2010,000767.3476,734 
Man GroupLuke Ellis16 Mar 20123,01895116855 
Man GroupLuke Ellis17 Mar 20626,98295.0595,633 
Man GroupRobyn Grew (coo)18 Mar 20153,20097.7149,653 
Man GroupMark Jones (cfo)16 Mar 20500,00093.4145467,073 
M&GJohn Foley16 Mar 20150,000111166,500 
M&GJonathan Daniels (cio)16 Mar 20150,000111.6167,400 
M&GMike Evans (chair)18 Mar 2051,62796.8550,000 
Plus500Alon Gonen17/18 Mar 201,101,442766.08,437,904 
Plus500Gal Haber (md)17/18 Mar 20264,312800.02,114,496 
Plus500Omer Elazari17 Mar 20100,000794.0794,000 
Plus500Shlomi Weizmann17 Mar 20100,000794.0794,000 
Plus500Elad Ben Izhak17 Mar 20229,587800.01,836,696 
Standard Life AberdeenNorman Keith Skeoch (ceo)17 Mar 2050,294197.499,255 
Standard Life AberdeenStephanie Jane Bruce (cfo)18 Mar 2025,914191.549,625 
GamesysNeil Goulden (exec ch)18 Mar 2019,500549.0107,055 
GamesysRobeseon Reeves (coo)19 Mar 2035,000653.0228,550 
UDG HealthcarePeter Gray (ch)18 Mar 2020,000450.090,800 
UDG HealthcareShane Cooke18 Mar 2015,500442.368,557 
UDG HealthcareBrendan McAtamney (ceo)19 Mar 2025,000454.0113,500 
UDG HealthcareNigel Clerkin (cfo)19 Mar 2020,000516.5103,300 
IWGMark Dixon (ceo)19 Mar 20295,800107.6318,281

Weighted average price

BarclaysJanet Ashley19 Mar 20132,80274.699,034

PCA of Mike Ashley, non-exec director

PlaytechMor Weizer (ceo)19 Mar 20134,000134.0179,486 
PlaytechAndrew Smith (cfo)19 Mar 2045,000129.058,220 
Auto TraderDavid Keens19 Mar 2025,000361.090,259 
CLS HoldingsBengt Mortstedt19 Mar 20311,980159.6497,920 
CLS HoldingsBengt Mortstedt20 Mar 20188,020159.2299,328 
SynthomerCalum MacLean (ceo)19 Mar 2011,000192.021,210 
SynthomerCalum MacLean (ceo)20 Mar 20305,677211.5646,476 
JD WetherspoonJohn Hutson (ceo)20 Mar 2012,000757.090,840 
ElementisPaul Waterman (ceo)20 Mar 20200,00049.198,288

Converted from US$

Genel EnergyBilgin Grup Dogalgaz20 Mar 201,015,00081.4826,161

PCA of Umit Tolga Bilgin

Genel EnergyBilgin Grup Dogalgaz23 Mar 20170,61884.4144,003 
CLS HoldingsSten Mortstedt23 Mar 20300,000158.5475,500