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Investing.com -- Shares of IWG climbed 2.5% following the company’s announcement of a record sales month in March and the progress of its share buyback program. The workspace provider reported system-wide revenues of $1,057 million, a 2% increase at constant currency, with group revenues remaining steady at $909 million.
The company-owned and leased segment saw revenues stay flat, but exhibited a 3% growth in open centers. The managed and franchised division boasted a significant 43% rise in fee revenue, along with a comparable 43% expansion in rooms to 202,000 and a 39% growth in its pipeline to 192,000. Digital and professional services also saw a 2% revenue increase, excluding a legacy contract loss which resulted in a 13% decline when included.
IWG’s balance sheet reflected a slight reduction in net debt from £712 million at the end of FY24 to £708 million. The firm also announced it will transition to US GAAP reporting in the first half of 2025, with investor workshops planned before the results are released.
The company has already completed $30 million of its planned $50 million share buyback and anticipates finishing the remainder by the first half results, with a target date of August 5. Furthermore, IWG has increased the total buyback amount to $100 million.
Despite a cautious outlook due to uncertain macroeconomic conditions, IWG maintains its guidance for FY25 EBITDA to be between $580 million and $620 million, aligning with consensus estimates around $603 million and RBC’s estimate of $617 million. The company also expects gearing to decline as it continues to target a medium-term EBITDA of $1 billion.
RBC analysts commented on IWG’s prospects, stating, "We remain positive - and think IWG should benefit from better disclosure and lower capital intensity. In addition, we expect FCF to be strong given the ramp up of sites already signed, and a number of years with capex well below depreciation."
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