Serviced office, business lounge and meeting room provider Regus has posted third quarter revenues of £386.6m, up 26 per cent. The group also cautioned that its full-year results would likely be hurt by its planned investments in new units.
Regus, whose customers include GlaxoSmithKline, Google and Toshiba, has said it expects to roll out up to 440 new centres this year, up from a previous projection of 350.
City analysts predict the new investments and faster than planned opening of new units will lead to a jump in revenues from £1.6bn to £1.9bn in two years’ time.
Goldman Sachs and Panmure Gordon cut their full-year earnings-per-share profit estimates, however, by 14 per cent on the expectation that the investment in new units would negatively impact operating profit by up to £14m.
The number of centres has grown to 1,687, up 82 since June, the company reported.
Communications Director Andrew Brown hailed “a good set of results” and told CN that the company’s growth was being “fuelled by a structural shift in the way people are working around the world”.
“Convenience is key,” Brown added, noting people were more inclined to meet in convenient networks, and pointing to the success in the UK of Regus motorway meeting areas on the M25 in Cobham and the M4 at Membury which he claimed were “packing them in”.
Revenue per occupied workstation (RevPOW), a key metric in the space rental business, increased 4.3 per cent, according to the company’s latest report.
The company’s mature centres (those opened before 31 December 2011) now make up 70 per cent of the Regus global portfolio and remains “highly cash generative” the company said by way of explanation for the group extending its financing headroom during the last quarter.
The Regus first half profit, however, dropped three per cent due to restructuring costs related to the acquisition of MWB Business Exchange in February.
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