IWG’s (IWG) shares have struggled since its shock profit warning in October, which highlighted a slow recovery in the group’s so-called mature business. However, the flexible workspace specialist’s chief executive, Mark Dixon, said it was beginning to move past this “speed bump”, with the revenue performance improving in the fourth quarter of 2017. The mature business saw a 0.5 per cent improvement in revenue, following a 1.8 per cent decline in the preceding quarter.
Performance essentially mirrored the wider property market, with revenue derived outside of London on the rise, registering sequential quarterly and year-on-year improvements. However, revenue from the mature centres, which are tenanted for at least a year and account for the bulk of revenue, fell by 1.2 per cent (at constant currencies) to £2.16bn.
Looking ahead, the group is expected to benefit from the introduction of the IFRS16 accounting standard, which requires companies to report their leases on the balance sheet as debt, but that won't apply to flexible contracts such as those provided by IWG. Mr Dixon said this had already led to increased interest from large- and medium-sized businesses.
Analysts from Peel Hunt are forecasting adjusted pre-tax profit for 2018 of £179m, giving EPS of 15.1p (from £149m and 12.4p in 2017).
| IWG (IWG) | ||||
| ORD PRICE: | 239p | MARKET VALUE: | £2.18bn | |
| TOUCH: | 239-239.6p | 12-MONTH HIGH: | 392p | LOW: 189p |
| DIVIDEND YIELD: | 2.4% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 80p* | NET DEBT: | 41% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 1.53 | 82 | 7.1 | 3.6 |
| 2014 | 1.68 | 87.1 | 7.4 | 4.0 |
| 2015 | 1.93 | 146 | 12.8 | 4.5 |
| 2016 | 2.23 | 174 | 14.9 | 5.1 |
| 2017 | 2.35 | 149 | 12.4 | 5.7 |
| % change | +5 | -14 | -17 | +12 |
| Ex-div: | 26 Apr | |||
| Payment: | 25 May | |||
| *Includes intangible assets of £712m, or 78p a share | ||||
