International Workplace Group Shares Tumble as H1 Revenue Falls

International Workplace Group (LON:IWG) shares fell sharply on Tuesday after the office space provider reported a drop in first-half revenue.

The stock declined more than 13% to 198.1p in morning trading, though it remains up 24% so far this year.

For the six months ended 30 June, group revenue slipped to $1.85 billion, compared with $1.87 billion a year earlier. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 6% to $262 million, while operating profit was flat at $68 million.

The company highlighted record system-wide revenue of $2.16 billion, supported by strong growth in its franchised and managed operations, which saw fee income rise 43% year-on-year.

Its Digital and Professional Services arm delivered 6% underlying revenue growth. However, revenue from company-owned centres dipped 1% to $1.59 billion, weighed down by lower revenue per available room, which fell 3% to $346.

Chief Executive Mark Dixon said: “We set out a clear strategy at our Investor Day in December 2023 for capital light growth to deliver cashflow, and business simplification. We have been delivering against this strategy and will continue to do so.”

Looking ahead, the group reiterated its guidance for full-year adjusted EBITDA of $525 million to $565 million, though it cautioned results would likely come in toward the lower end of the range due to further investment. The company also increased its buyback programme for 2025 to at least $130 million.

“In the last six months, more locations were opened than in the entire first decade of our existence. We now have around 1 million rooms in 121 countries with a significant pipeline. This is expected to drive our future growth,” added Dixon.