Shares in office provider IWG (GB:IWG) plunged after the company revealed higher-than-expected losses in its half-year results – amid wider fears of recession.
The managed office space provider saw revenues climb 22.3% to £1.45 billion up from £1.17 billion in the same period last year, driven in part by the trend for hybrid working.
The company saw an operating loss of £36 million, down from £147.8 million in the same period last year – but this was wider than markets had been expecting.
What do IWG do?
The company, founded in 1989, offers managed workspaces under brands such as Regus.
The company noted that it had faced difficulties due to lockdowns in China, but said it remained ‘cautiously optimistic’ about the second half of 2022.
Mark Dixon, Chief Executive of IWG plc, said: “With hybrid working becoming the preferred operational model for a rapidly growing number of companies, we remain confident about the continuing structural growth drivers at play in our industry.
“We continue to build resilience and cost efficiency into our business, and we have repeatedly demonstrated our ability to address new challenges. These attributes will be important as we continue to navigate the headwinds created by increased geopolitical tensions in Europe, general inflationary pressures, and the ebb and flow of COVID-related restrictions in some markets.”
Shares plunged on the news, hitting new lows of 170p, according to TipRanks Stock Analysis page: the shares are already 43.36% down in the year to date.
View from the City
According to TipRanks’ analyst rating consensus, IWG stock has a Buy rating, based on one Buy rating.
In the wake of yesterday’s results, HSBC analyst Dan Cowan maintained his Buy rating on the stock, lowering his price target to 295p from 305p.
Conclusion
Yesterday’s results disappointed analysts, but the trend for hybrid working is not going away, so analyst Dan Cowan remains optimistic on the stock’s long-term prospects.
