IWG plc, a global leader in providing hybrid workspaces, has announced its preliminary results for the year ended December 31, 2023, marking a milestone in its 35-year history. Operating under brands such as Regus and Spaces, and through its digital services business Worka, IWG has solidified its position with operations spanning 895,000 rooms across 3,514 locations in 120 countries.
The company reported its highest-ever revenue, achieving a 10 percent growth in system-wide revenue to £3.3 billion ($4.1 billion) on a constant currency basis and an 8 percent growth at actual currency rates. This revenue surge was paralleled by a significant 34 percent increase in EBITDA to £403 million, compared to £311 million in 2022, highlighting the effective combination of revenue growth and cost management.
Cash flow from business activities also increased, reaching £297 million, up from £151 million in the year before. Concurrently, IWG reported a £104 million reduction in net financial debt.
2023 was a year of aggressive expansion for IWG, with the company doubling its global footprint in diverse locations, significantly without incurring capital expenditures. This expansion came alongside continued cost discipline, allowing revenue growth to outstrip cost increases amidst global inflationary pressures.
The board’s decision to resume dividend payments, recommending a final dividend of 1.0p per share, signals confidence in IWG’s sustainable growth and financial strategy.
The Managed & Franchised segment witnessed a 49 percent jump in fee income to £50 million. This segment’s performance was bolstered by a record 117,000 rooms signed in 2023, showcasing the increasing demand for IWG’s services. The Company-Owned & Leased segment also saw substantial growth, with gross profit increasing 41 percent to £528 million and margins improving significantly.
The Worka platform, central to IWG’s digital strategy, continued to evolve with an 18 percent revenue increase to £319 million. Despite anticipating some headwinds, the platform maintains a strong growth trajectory, supported by a stable gross profit margin of 50.2 percent in 2023. IWG’s commitment to further investment in Worka underscores its strategic focus on capturing the expanding market for hybrid working solutions.
IWG’s outlook for 2024 remains cautiously optimistic, with a focus on efficiency and cost control to achieve expected EBITDA levels. The company seems well-placed to capitalize on the growing demand for hybrid working as businesses globally adjust to new working paradigms.
