News Column

Regus First-Half Profit Flat As Sterling Strength Hits Earnings

August 26, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Regus PLC Tuesday said a strong pound hit its reported profit in the first half of the year, taking the shine off strong revenue growth in the period on the back of network expansion and strong returns.

The workplace provider declared an interim dividend of 1.25 pence, a 14% increase on last year, which it said reflects "strong underlying performance and prospects".

Regus posted a flat pretax profit of GBP31.0 million for the six months to June 30, the same level as the GBP31.1 million reported in the first half of last year. Whilst flat on a reported basis, it said profit was up 23% at constant exchange rates, driven by strong revenue growth and a "tight grip on costs".

First-half revenue increased to GBP804.7 million, compared with GBP744.7 million in 2013, up 8.5% at actual exchange rates, and almost 17% on a constant currency basis, boosted by strong customer demand.

"We have grown our network at an impressive rate and improved earnings... Overall, our underlying momentum is strong. We remain confident about the rest of the year, although our reported results will reflect the strength of sterling," said Regus Chief Executive Mark Dixon in a statement.

Regus said its mature centres continue to deliver good returns and continue to convert earnings into cash, while its new centres are also progressing well.

The company said it now plans to add at least 450 business centres in 2014, which it said will hit its full year results.

"While this will lead to additional opening costs and initial operating losses which will impact... full year results, we remain confident that our strategy to make significant investments this year will drive future revenue, profit and cash flow," said Dixon.

Regus shares were down 3.8% at 189.00 pence in early trading Tuesday, one of the biggest fallers on the FTSE 250.

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Source: Alliance News

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