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.
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 | ||||||
Company | Director/PDMR | Date | No. of shares | Price (p) | Aggregate value (£) | Comments |
Lloyds Banking Group | Lord Lupton | 16 Mar 20 | 250,000 | 33.2 | 83,000 | |
IWG | Mark Dixon (ceo) | 17 Mar 20 | 241,924 | 144.65 | 349,943 | 28.2% position |
Wizz Air | William Franke (ch) | 17 Mar 20 | 30,000 | 2,355 | 706,500 | |
IWG | Mark Dixon (ceo) | 18 Mar 20 | 1,600,000 | 115.2 | 1,843,200 | Weighted average price |
Cineworld | Eric Senat | 18 Mar 20 | 423,410 | 23.5 | 99,501 | |
Cineworld | Anthony Bloom (ch) | 18 Mar 20 | 839,704 | 276.49 | 232,173 | PCA |
EMIS Group | Andrew Thorburn (ceo) | 18 Mar 20 | 10,000 | 767.34 | 76,734 | |
Man Group | Luke Ellis | 16 Mar 20 | 123,018 | 95 | 116855 | |
Man Group | Luke Ellis | 17 Mar 20 | 626,982 | 95.0 | 595,633 | |
Man Group | Robyn Grew (coo) | 18 Mar 20 | 153,200 | 97.7 | 149,653 | |
Man Group | Mark Jones (cfo) | 16 Mar 20 | 500,000 | 93.4145 | 467,073 | |
M&G | John Foley | 16 Mar 20 | 150,000 | 111 | 166,500 | |
M&G | Jonathan Daniels (cio) | 16 Mar 20 | 150,000 | 111.6 | 167,400 | |
M&G | Mike Evans (chair) | 18 Mar 20 | 51,627 | 96.85 | 50,000 | |
Plus500 | Alon Gonen | 17/18 Mar 20 | 1,101,442 | 766.0 | 8,437,904 | |
Plus500 | Gal Haber (md) | 17/18 Mar 20 | 264,312 | 800.0 | 2,114,496 | |
Plus500 | Omer Elazari | 17 Mar 20 | 100,000 | 794.0 | 794,000 | |
Plus500 | Shlomi Weizmann | 17 Mar 20 | 100,000 | 794.0 | 794,000 | |
Plus500 | Elad Ben Izhak | 17 Mar 20 | 229,587 | 800.0 | 1,836,696 | |
Standard Life Aberdeen | Norman Keith Skeoch (ceo) | 17 Mar 20 | 50,294 | 197.4 | 99,255 | |
Standard Life Aberdeen | Stephanie Jane Bruce (cfo) | 18 Mar 20 | 25,914 | 191.5 | 49,625 | |
Gamesys | Neil Goulden (exec ch) | 18 Mar 20 | 19,500 | 549.0 | 107,055 | |
Gamesys | Robeseon Reeves (coo) | 19 Mar 20 | 35,000 | 653.0 | 228,550 | |
UDG Healthcare | Peter Gray (ch) | 18 Mar 20 | 20,000 | 450.0 | 90,800 | |
UDG Healthcare | Shane Cooke | 18 Mar 20 | 15,500 | 442.3 | 68,557 | |
UDG Healthcare | Brendan McAtamney (ceo) | 19 Mar 20 | 25,000 | 454.0 | 113,500 | |
UDG Healthcare | Nigel Clerkin (cfo) | 19 Mar 20 | 20,000 | 516.5 | 103,300 | |
IWG | Mark Dixon (ceo) | 19 Mar 20 | 295,800 | 107.6 | 318,281 | Weighted average price |
Barclays | Janet Ashley | 19 Mar 20 | 132,802 | 74.6 | 99,034 | PCA of Mike Ashley, non-exec director |
Playtech | Mor Weizer (ceo) | 19 Mar 20 | 134,000 | 134.0 | 179,486 | |
Playtech | Andrew Smith (cfo) | 19 Mar 20 | 45,000 | 129.0 | 58,220 | |
Auto Trader | David Keens | 19 Mar 20 | 25,000 | 361.0 | 90,259 | |
CLS Holdings | Bengt Mortstedt | 19 Mar 20 | 311,980 | 159.6 | 497,920 | |
CLS Holdings | Bengt Mortstedt | 20 Mar 20 | 188,020 | 159.2 | 299,328 | |
Synthomer | Calum MacLean (ceo) | 19 Mar 20 | 11,000 | 192.0 | 21,210 | |
Synthomer | Calum MacLean (ceo) | 20 Mar 20 | 305,677 | 211.5 | 646,476 | |
JD Wetherspoon | John Hutson (ceo) | 20 Mar 20 | 12,000 | 757.0 | 90,840 | |
Elementis | Paul Waterman (ceo) | 20 Mar 20 | 200,000 | 49.1 | 98,288 | Converted from US$ |
Genel Energy | Bilgin Grup Dogalgaz | 20 Mar 20 | 1,015,000 | 81.4 | 826,161 | PCA of Umit Tolga Bilgin |
Genel Energy | Bilgin Grup Dogalgaz | 23 Mar 20 | 170,618 | 84.4 | 144,003 | |
CLS Holdings | Sten Mortstedt | 23 Mar 20 | 300,000 | 158.5 | 475,500 |