Offices giant IWG bullish despite taking £156m Covid-19 hit

Offices specialist IWG today said it expects Londoners increasingly to work in the suburbs as it took a £156 million hit from shutting sites across the globe due to Covid.

The Regus owner plans to cut about 130 of its 3000 strong network of sites at a cost of £126.7 million after the virus accelerated plans to shut less profitable sites. IWG also took a £29.1 million charge for a string of issues including "expected credit losses, transaction costs for deferred deals, restructuring costs and goodwill impairment".

With employees in Britain still largely working from home, bosses are rapidly assessing their needs in terms of office space, with sites in city centres seen as vulnerable.

But IWG believes it is well placed to capitalise on a growing desire to work closer to home as it has more sites in suburbs than rivals including WeWork. It has sites on London’s outskirts including in Hemel Hempstead and Hayes. The firm raised £320 million in May to fund acquisitions.

Chief executive Mark Dixon said: "This global crisis has dramatically changed the ways companies will work. In the new world of working post COVID-19, offices will still be needed but there will be a greater requirement for more flexible space.

"More companies will have distributed workforces with more satellite offices, more employees working closer to home or continuing to work from home. With our decentralised portfolio of workplace locations in over 1,100 towns and cities, both urban and suburban, we are uniquely positioned to help companies adapt to a new world of working.

First half revenues rose 3% to £1.3 billion but losses hit £176 million and the shares fell 8% to 207p.