IWG 2018 interim results
Revenue from open centres increased 9.8% to £1,194.1m
Group revenue increased 7.1% to £1,204.0m with sequential quarterly improvement
Mature revenue growth of 2.4% with strong performance in most large markets
Strong sales activity trends expected to result in further revenue growth in the second half
Mature gross profit margin increased 60bp to 19.7%
Operating profit down 29% to £60.0m (down 31% at actual rates) given the significant additional growth-related and talent investments, incremental marketing spend and weakness in the UK
Post-tax cash return on pre-2014 investment of 16.6%; cash generation (before net growth capital expenditure, share repurchases, and dividends) of £75.7m
Prudent financial position maintained with net debt of £383.2m (1.1x net debt : LTM EBITDA)
Net growth capital expenditure of £130.1m, driven by strong network expansion and improvement in network quality. 2.8m sq. ft. of space added with 132 new locations (126 organic) added in H1 2018. Now in 3,211 locations, with 54.2m sq. ft. of space
Significant focus on the roll out of our large co-working format, Spaces, with 45 new locations and 1.5m sq. ft. of space added in H1 2018. Total of 124 Spaces locations at 30 June 2018
Good visibility on net growth capital expenditure for the whole of 2018. Current pipeline visibility of approximately £230m, representing 275 locations, 6.7m sq. ft. of additional space (c.22% more space than added in 2017)
11% increase in interim dividend to 1.95p (H1 2017: 1.75p), reflecting conviction in the long-term growth outlook
Share buyback programme announced
The Board remain confident that the Group will deliver a full year result in line with management's expectations
