UPDATE ON TRADING AND THE PROLONGED IMPACT OF COVID-19 IN SOME MARKETS - 7 June 2021
IWG plc, the leading global operator of workspace brands, today issues an update on trading and the prolonged impact of the COVID-19 pandemic in some of the Group's markets.
Whilst we have continued to see strong recovery in some of our markets since our first quarter trading update, including positive occupancy momentum in the US, the overall improvement in occupancy across the whole Group has been lower than previously anticipated as a result of the prolonged impact of COVID-19, including continuing lockdown restrictions and the emergence of new variants of the virus in some markets. Accordingly, this will delay the anticipated recovery in our business and, given the operational gearing of the Group, is expected to have a significant impact on the Group's results for 2021, with underlying Group EBITDA for 2021 now expected to be well below the level in 2020.
Since our first quarter trading update, we have continued to see unprecedented demand for our flexible work products as many more enterprises adopt hybrid working. Interest in partnering with IWG continues to strengthen significantly and we have a very strong pipeline of potential partners wanting to work with us to grow the platform. As previously indicated, good progress is being made in relation to larger master franchise agreements, with several in the final stages of discussions, and we anticipate making further announcements in this regard in due course.
In markets where COVID-19 related restrictions are easing such as the US, we have seen positive momentum. Occupancy is improving, enquiries have reached pre-Covid-19 levels, we have an increasing pipeline of corporate customers on network-wide deals and service revenues are starting to improve. These positive trends support the Board's view that the prolonged impact of COVID-19 on the Group's 2021 results is one of timing and that, as lockdown restrictions ease, the significant actions taken to restructure the Group's cost base, together with the unprecedented demand for hybrid working and the Group's unrivalled national and international network coverage, will deliver a strong improvement in profitability and cash generation. Accordingly, the Board's expectations for a strong recovery in 2022 are broadly unchanged. The Group continues to maintain a strong financial position with significant liquidity.
Conference call details
IWG plc will be hosting a call for analysts and investors at 08.30 BST this morning. Please register for the call via the following link to gain your unique access code:
A replay facility will be available for 7 days following the call:
Replay dial-in number: +44 (0) 33 0606 1118
Access PIN: 454360
This announcement contains inside information
For further information, please contact:
IWG plc Tel: + 41 (0) 41 723 2353
Mark Dixon, Chief Executive Officer
Glyn Hughes, Chief Financial Officer
Wayne Gerry, Group Investor Relations Director
Brunswick Tel: +44 (0) 20 7404 5959
This trading update contains certain forward looking statements with respect to the operations of IWG plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur i the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. Nothing in this announcement should be construed as a profit forecast.