IWG PLC (LON:IWG), the serviced office space provider, has joined the growing throng of companies suspending its dividend.
The company has also suspended its £100mln share repurchase programme that was announced earlier this month, although £27.5mln of the money set aside has already been spent on buying back shares.
The company said it expects there to be pressure on its global business as countrywide lockdowns are implemented in an increasing number of geographies but said it is too early to provide earnings guidance in relation to the remainder of the current financial year.
The group's financial position remains strong, IWG said, with a low level of financial leverage and substantial access to liquidity.
“Our net debt to EBITDA ratio (on a pre-IFRS 16 basis) as at 31 December 2019 was 0.7x. On 9 March 2020, we extended the maturity profile of the £950m Revolving Credit Facility until March 2025,” it revealed.
Peel Hunt downgrades to 'hold'
Following the announcement, analysts at Peel Hunt downgraded the stock to 'hold' from 'buy' and slashed the target price to 160p from 460p.
The broker said the balance sheet "is going to become stretched", while investors face "too much risk and too little visibility".
Shares tanked 20% to 127.35p on Monday morning.
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