IWG Reports Record Revenues But Cautions On Future Cost Control Efforts

Hybrid work specialist IWG has reported a slightly larger pretax loss for 2023 despite its highest-ever revenues and restarting dividend payouts.

The flexible office provider's pretax losses from continuing operations widened to £189M for the year, up from a deficit of £105M the previous year, according to its preliminary results. The loss was related to one-off costs from closing locations and write-offs to do with a telephone system. 

However, IWG said it had delivered its highest earnings in its 25-year history, up 8% to £3.5B, although it cautioned about prospects for the year ahead as it looked to keep costs under control.

IWG lays claim to be the world's largest hybrid workspace platform, with operations across 895,000 rooms distributed among 3,514 locations in 120 countries through brands such as Regus and Spaces, plus digital services business Worka.

In its preliminary results, it said that its earnings before interest, taxes, depreciation and amortisation in 2023 had risen 34% to £403M, while it had lowered its debt by £104M.

The group said it had doubled its rate of expansion compared to 2022, spending a total of £55M on new centres with 37,000 rooms opened while maintaining “cost discipline with revenue growth higher than costs.” IWG CEO Mark Dixon said cost control would be a major focus for 2024.

“We enter 2024 continuing our momentum from 2023 as we continue to grow our customer base, our global partnerships and our best-in-class network,” Dixon said in a statement. “While 2023 was a record year for both revenue and network size, we continue to see significant growth potential.

“With 1.2 billion white-collar workers globally and a potential audience valued at more than $2T, there is substantial room for growth and as a company, we have a laser-like focus on capturing more of this market over the coming months and years.”

IWG added that demand for hybrid work continued to grow as businesses looked for ways to reduce costs and respond to the need for greater flexibility.

However, the company warned that it remained cautious. It also said that it was exploring the possibility of moving its listing from London to the U.S., which will be a major area of growth for the company. 

IWG’s share price was off just under 3% after the announcement and just under 5% below the stock price a year ago.