(Sharecast News) – Workspace provider IWG reported a strong performance across key financial metrics in its first half results on Tuesday.
The FTSE 250 operator of brands including Regus posted a record six-month system-wide revenue total of £1.679bn, marking 14% growth in constant currency year-on-year.

Group revenue for the period stood at £1.484bn.

IWG said its EBITDA, benefiting from both revenue momentum and diligent cost management, surged 48% to £198m, up from £131m in the first half of 2022.

The company reported positive cash flow from business activities, amounting to £162m, swinging from the £4m negative flow in the first six months of 2022.

Over the last six months, IWG said it had also successfully reduced its net financial debt by £54m, bringing it down to £658m.

Operationally, IWG said it had signed contracts for an additional 400 new locations in the first half, of which only 5% were company-owned.

The firm’s net growth capital expenditure fell to £34m, from £57m a year earlier, meeting management’s projections.

IWG added that its capital-light growth strategy led to a 40% rise in fee income, to £21m – a figure that was expected to grow significantly as more locations opened over an average period of 18 months.

Worka, IWG’s hybrid-working focussed platform, reported a revenue increase of 32% to £153m and a 35% growth in EBITDA to £62m.

Additionally, the platform was poised for further growth with new product launches scheduled for the fourth quarter.

Looking at its balance sheet, IWG successfully refinanced its debt facilities through to the fourth quarter of 2025 in the period, while a strong cash generation total of £68m was directly used to reduce gross debt.

“We continue to grow as expected, producing a record period for IWG with our highest ever revenue in our over 30-year history, up 14% from the first half of 2022,” said chief executive officer Mark Dixon.

“Importantly, we have achieved this alongside increasing EBITDA and cashflow generation, which is reducing net debt.

“We have done this through a combination of higher demand for flexible work products, improved pricing and cost discipline and I am looking forward to continuing this momentum into the second half of 2023 and into 2024.”

Dixon said that during the first half, IEG accelerated its capital-light growth strategy, allowing it to capitalise on a growing pipeline of property investors seeking to maximise returns by partnering with IWG.

“We have signed almost as many agreements in the first half of 2023 as we did in the whole of 2022.

“We continue to be well placed to deliver further revenue, profitable growth and reducing leverage as more companies permanently embrace hybrid working as their preferred model with IWG set to be the biggest beneficiary.”

At 0847 BST, shares in IWG were up 0.47% at 150.7p.

Reporting by Josh White for Sharecast.com.

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