Regus increases 2013 final dividend by 13.6%

DividendMax Ltd.

Regus increases 2013 final dividend by 13.6%

Strong financial performance at Group level with biggest ever investment - full year dividend up 13%

Group revenue increased 23.3%to £1,533.5m

Operating profit up 1% to £90.8m notwithstanding the impact of £301.1m investment in growth and £7.4m of MWB transaction and restructuring costs

Firm control of cost base with overheads (ex. R&D) on a per available workstation basis reduced by 3.8%

Net debt at 31 December 2013 of £57.2m reflecting significant investment in growth and its impact on operating profit 

14% increase in final dividend to 2.5p (2012: 2.2p), a full year increase of 13% reflecting strong mature performance

Mature business continues excellent performance - strong increase in operating profit, margins and EPS

Mature operating profit up 33% to £205.3m. Economies of scale and overhead efficiencies driving an increase in mature operating margin to 16.7% (2012: 13.1%)

34% increase in mature EPS to 17.0p (2012: 12.7p)

Mature revenue growth of 3.7% to £1,226.3m driven by:

o Revenue per occupied workstation (REVPOW) increase to £7,750, an improvement of 4.3% or £321

o Continued strong occupancy of 83.8% (2012: 84.5%) 

Gross margin improves to 29.3% (2012: 27.8%).

Strong cash generation, with free cash flow representing 16.6p per share or 12.8% of revenue

Record growth - continuing significant investment to increase national networks

£301.1m invested in growth: 448 new centres added, network increased to 1,831 business centre locations

New 2012 and 2013 centres performing in-line with expectations

17% annual increase in membership to 1.58 million

MWB fully integrated and on track to add at least £15m to Group operating profit in 2014

During 2014 we anticipate opening at least 300 centres as well as the addition of more third place locations 

Mark Dixon, Chief Executive of Regus, said:

"It's been another record year of achievement for Regus, with strong progress made across all parts of the business. Group revenue was up 23%, following a 30% increase in the size of our global network to 1,831 business centre locations, an unprecedented rate of growth and investment, which included the successful integration of MWB.

Our Mature business remains the engine room of the Group and it delivered operating profits in excess of £205m, a 33% increase, alongside free cash flow of £157m. This strong performance from our mature business allowed us to reinvest in growth, so ensuring the incremental returns of the future.

At this early point in the year it is always somewhat difficult to predict precisely how many locations we will add, but we expect at least 300 new business centre locations as well as the addition of more third place locations.

Current trading is good, although the strengthening of sterling in recent months will affect the translation of our results. Notwithstanding this, we remain confident in our business model and our prospects for the year ahead."

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