Shares in International Workplace Group slumped more than 11% after analysts flagged risks to cashflow at the flexible office space provider.<\/p>\n
Shares in IWG, which owns the Spaces \u2060and Regus brands, are now down 5%, still the largest loser on the FTSE 250 index this morning.<\/p>\n
The company said cost cuts would lift results from the second half of the year, as it grapples with higher debt and costs in the wake of the \u2060Middle East war, as well as workplace changes linked to AI.<\/p>\n
IWG\u2019s \u200cadjusted core profit edged up 1% to $265m in the six months to 30 June, while system-wide revenues climbed 11% to \u200ba record $2.4bn.<\/p>\n
It reiterated its \u200c2026 forecast of \u200cadjusted core profit between $585m and $625m, amid accelerating centre \u200csignings and rising customer enquiries. The company signed up 728 clients compared with 496 a year earlier, and opened nearly 400 centres, versus 309 last year. The business grew rapidly in recent years, after the pandemic revolutionised working patterns and demand for flexible office space.<\/p>\n
Christian Schmitz, the chief executive, said:<\/p>\n
double quotation markOur strategy remains clear. We continue to expand our global coverage at pace, building an unrivalled network that extends from the world\u2019s largest cities to smaller towns and regional markets.<\/p>\n
Analysts at Jefferies flagged risks to cashflow and future share buybacks, even though the company stuck to its cost-cutting targets and forecast cashflow in the second half of the year ahead of last year\u2019s. Cash flow before corporate activities stood at a negative $55m in the first half.<\/p>\n
In June, IWG increased its share buyback programme by $50m to $150m.<\/p>\n