Peel Hunt is sticking with its ‘buy’ rating and 600p price target on Workspace Group PLC (LSE:WKP), even as the office space provider warned of a £7 million profit headwind in the year ahead.
The broker expects 2026 trading profit to land closer to £62 million, down from previous estimates of around £72 million, with earnings per share still expected to cover the current dividend.
Shares dropped 11% to 404p after Workspace said cost pressures, lower occupancy, and larger unit exits would weigh on future earnings. A small decline in property values is also expected this year, reflecting weaker rental values.
The company said its new strategic plan, set for release with full-year results on 5 June, will focus on boosting occupancy and driving income growth, including platform upgrades and targeted marketing.
Workspace owns and operates flexible office space across London, primarily for small and medium-sized businesses.
Despite the challenges, Peel Hunt points to a 42% discount to NAV and a 6.4% dividend yield as reasons for optimism.