Business
Update on Trading and Growth Investment Programme
Update on Trading and Growth Investment Programme.
About this update from International Workplace Group Plc
[{"type":"text","content":"\n \nRNS Number : 7175S IWG PLC 27 June 2018 \n\n \nNOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION\n \nTHIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.\n \nFOR IMMEDIATE RELEASE\n \nUPDATE ON TRADING AND GROWTH INVESTMENT PROGRAMME - 27 June 2018\n \nIWG plc, the global operator of leading co-work and workspace companies, today issues an update on current trading and its investment programme.\n \nGlobal sales activity trends are strong and these are converting into improvements in both occupancy and pricing in our mature estate and strong improvements in our newer estates. The real benefit of these improvements is expected to come through in the second half of the year. Notwithstanding this, our UK business is not performing to management expectations. \n \nThe continuing global growth in demand in our industry reinforces our desire to further strengthen our position within it. Therefore, pursuant to the Q1 trading update of 2 May 2018, we have accelerated our network growth. We now expect to add approximately 6.7m sq. ft. of new space, which represents an annual organic increase of approximately 45% and is over 17% higher than our previous guidance. We now anticipate adding 275 new locations to our network with an associated net growth investment of approximately £230m. Previous visibility was approximately £200m of net growth expenditure, equating to an additional 5.7m sq. ft. and 230 new locations.\n \nHigher network growth brings additional short-term opening losses, along with incremental overhead costs to support the growth. Considering this, together with the current weak performance of our UK business, which is being addressed by local management, group operating profit for 2018 is now expected to be below management's previous expectations by approximately £15m to £20m. Nonetheless, we are confident that this additional growth investment will generate good returns in the future as we expand our global footprint and network to meet increasing demand.\n \n \n \n \n \n \nConference call details\n \nIWG plc will be hosting a call for analysts and investors at 08.30 BST this morning. Details are s...