Serviced office pioneer expands
4 May 2012
Regus, the world's largest provider of flexible workspaces, said the business continued to perform in line with management expectations in a trading update on the three months to 31 March. Group turnover increased by 8.8% to £299.3m in the three months to 31 March 2012, from £275.1m in the corresponding period last year.
The mature business, which makes up over 85% of Regus's global portfolio of centres, continued to perform well, Regus said. Revenues for these centres (which were opened prior to 31 December 2010) increased 4.4% to £282.2m in the three months to 31 March 2012, from £270.2m in the corresponding period last year. The like-for-like increase reflects “continued healthy levels of occupancy”, as well as growth in Revenue Per Occupied Workstation (REVPOW), which in the quarter improved to £1,883, an increase of 1.4% (up £26) at constant currency rates and 1.0% (up £19) at actual rates.
The group also remains focussed on the execution of its growth strategy. It opened 37 centres in the first quarter of 2012, compared with just 12 centres in the first quarter of 2011. As a result the total number of workstations increased to 208,152 as at 31 March 2012 (204,043 workstations as at 31 December 2011). The group now has 176 new centres (centres opened on or after 1 January 2011).
Regus said it still expects to open 200 new centres in 2012 and continues to explore a number of Third Place opportunities. Regus said the accelerated pace of new centre openings since the second half of 2011 had weighed on profitability in early 2012. It said the financial drag from new centres is expected to diminish through the remainder of this year. Regus invested a further £25m of capital expenditure in our growth programme in the three months to 31 March 2012.
As a result of the accelerated opening programme and associated start-up losses, its net cash position declined by £18m to £170m at 31 March 31 2012. As announced on 20 March 2012, the board has recommended a 14% increase in the final dividend per share for 2011 from 1.75p to 2.0p.
Regus said: “Overall, our business has demonstrated continued resilience and flexibility in the face of challenging market conditions and we are comfortable with our plan to invest further to accelerate growth. As always, however, we are ready to scale back our growth plans if macro-economic conditions were to deteriorate.”