Strong financial performance at Group level
Group revenue increased 20.8% at constant currency to £744.7m (22.4% at actual rates)
Underlying operating profit rose by 22% to £41.7m (H1 2012: £34.2m) excluding £7.4m of transaction and restructuring costs related to the acquisition of MWB Business Exchange ('MWB'),
Underlying total overheads, excluding the MWB transaction and restructuring costs, as a % of sales reduced from 19.5% to 18.7%; average cost per available workstation reduced by a further 7% at constant currency
Net debt position at 30 June 2013 of £14.0m reflecting significant investment in growth
10% increase in interim dividend to 1.1p (H1 2012: 1.0p), reflecting strong underlying performance
Mature centres continue to improve
Mature revenue growth of 4.5% at constant currency to £626.0m (5.9% at actual rates)
Gross margin improves to 28.5% (H1 2012: 26.7%). Underpinned by:
o Revenue per occupied workstation (REVPOW) increase to £3,913, an improvement of 3.7% or £136 at constant currency (5.2% or £192 at actual rates)
o Continued strong occupancy of 84.2% (H1 2012: 83.9%)
Mature operating profit up 50% to £91.4m. Economies of scale and overhead efficiencies driving an increase in mature operating margin to 14.6% (H1 2012: 10.3%)
52% increase in mature EPS to 7.6p (H1 2012: 5.0p)
Strong cash generation, with free cash flow representing 7.7p per share or 11.5% of revenue
Continued investment in growth
£186.4m invested in growth
203 new centres added in H1, network increased to 1,605 including our 100th country, Nepal
Remain on track to open at least 350 centres in 2013
New 2012 and 2013 centres performing in-line with expectations
21% annual increase in membership to 1.45 million
Interest in Third Place partnerships remains strong but is still in development stage
Integration of MWB and realisation of cost synergies proceeding to plan
Mark Dixon, Chief Executive of Regus, said:
"Building on a strong performance in 2012, Regus continues to display significant positive momentum, with Group revenue and underlying operating profit both up 22%.
In a growing market driven by fundamental changes in the way people and businesses choose to work, we are successfully implementing our strategy. Our Mature Centres business continues to perform strongly and generate significant cash flow and we continue to find good opportunities to reinvest into the business to drive further growth. Over the six months our network increased by 14% to 1,605 locations, and we remain on track for at least 2,000 by the end of 2014. At the same time we maintained a firm grip on overheads, which decreased by 7% per workstation.
Overall, whilst mindful of the macroeconomic backdrop, we remain on track to deliver our full year expectations."
