IWG PLC (LON:IWG) saw its shares jump 8% higher on Tuesday after the serviced offices group reported strong growth in third quarter revenues, driven by overseas operations.
For the three months to the end of September, FTSE 250-listed group saw its revenue increase by 10% at constant currency rates to £637.9mln, up from £585.7mln a year earlier, driven by strong open centre revenue growth of 13.2%.
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The firm – which was formerly known as Regus – highlighted good performances in the US, EMEA and Asia-Pacific regions, which more than offset disappointment from the UK.
For the nine months period to the end of September, IWG’s group revenue rose by 8.1% to £1.84bn, up from £1.76bn a year earlier.
The company said mature occupancy for the three month period rose by 0.7 percentage points on a like-for-like basis to 74.3%.
New locations boost
During the third quarter, IWG added 72 new locations to its global network, bringing the total amount of locations added for the year to date to 204 new locations.
In addition, during the quarter, the firm agreed to cover the development of 25 locations over the near-term, taking the total for the group to 115.
IWG said it remains confident that it will deliver a full year result in line with management's expectations.
In reaction to the upbeat trading statement, IWG shares were 8.1% higher at 256.10p in mid-morning trading.
Strategic opportunities
IWG shares took a tumble in early August after the group announced that it had terminated takeover talks with three remaining three bidders - Starwood Capital European Operations Ltd, Terra Firma Investments Ltd and TDR Capital LLP - saying none were capable of delivering an executable transaction at a recommendable price.
At the weekend, Sky News reported that IWG was looking at proposals to spin off its property estate, leaving the group with a "global franchising model".
In today’s statement, IWG said it “continues to explore a range of potential strategic opportunities to deliver increased value and returns for shareholders.”
The group added; “We will continue to take a targeted approach to grow our business, ensuring we commit resources which will deliver attractive returns.
“We expect increased franchising activity and our current pipeline of franchise opportunities is strong across both existing and new geographies.
“We are also in discussions with a number of interested parties who wish to partner with us across entire countries.”