Regus cuts costs with tech deals

TROUBLED office provider Regus continued its drive to cut costs by striking a string of technology contracts that it says will save it £3.3m a year.

The stock rose 3 1/2p to 46p as the company said it had reached agreements with computer maker Compaq, Colt Telecom and software group Cedar covering the technology it supplies to its tenants.

The move is part of an effort by Regus to pare its operating costs to become cash-flow positive by the first quarter of next year. It has axed 800 jobs in the past three months but said that this figure would not increase as a result of the latest moves.

The company revealed last month that chief executive Mark Dixon and finance director Stephen Stamp are working for free.

Regus lost £97.6m in the past quarter. However, the shares have recovered from a low of 11 1/2p amid a growing belief that the company's cash reserves of £86m would last until it reversed its negative cash flow.