TIDMRGU
RNS Number : 9470W
Regus PLC
03 May 2016
FIRST QUARTER TRADING STATEMENT - 3 May 2016
Regus plc, the world's largest provider of flexible workspace
solutions, today issues its trading statement for the period to 31
March 2016.
Continued progress in Group performance
The Group has enjoyed good trading in the three months to 31
March 2016, generating a financial performance in line with
management expectations.
This has been an important three months in the development of
our business. We have implemented the significant changes to our
field and management structures we previously announced. We are
also continuing to transition toward our goal of less capital
intensive growth through increased use of partnerships.
Our strong discipline to drive further cost efficiency continued
through this quarter and has delivered good margin performance,
strong profit growth and cash generation. Prevailing exchange rates
have provided a modest tailwind on the translation of our results
during the first quarter.
In the three months to 31 March 2016, Group revenue increased to
GBP532.5m compared with GBP452.3m in the corresponding period last
year, an increase of 14.5% at constant currency rates (up 17.7% at
actual rates). This performance has been driven strongly by the
development of the 554 locations added during 2015.
Underlying cash generation[1] has been strong and more than
doubled year-on-year to GBP56.4m in the quarter (Q1 2015:
GBP25.2m), reflecting the good trading performance and improved
working capital management. After investing a total of GBP39.5m
(net)(2) in growth in the quarter, net debt at 31 March 2016
reduced to GBP183.0m from GBP190.6m at the 2015 year end. This is a
strong performance in what is normally our weakest quarter for cash
generation and demonstrates that we have maintained a prudent
balance sheet.
Network development
The Group's focus remains on building long-term shareholder
value through delivering attractive returns from our existing
business and continuing with the disciplined investment in new
locations. During the first quarter we added 42 new locations to
our global network. These represented over 0.5m sq ft of space
added to the network, which now totals more than 46m sq ft
globally. As at 31 March 2016, the Group had a total of 2,799
locations, with the total number of co-working seats / workstations
(including non-consolidated) increasing to 447,548 (434,162 as at
31 December 2015)(3) .
As of 27 April 2016 we had visibility on net growth capital
expenditure for 2016 of approximately GBP120m and represent
approximately 350 locations. In total these locations add
approximately 4.5m sq ft of space to our global portfolio. The
pipeline includes a number of larger co-working locations in major
cities, which have a higher associated net capital investment,
excluding these, the average net capital cost per location
continues to fall, demonstrating that we are being increasingly
successful in achieving partnership deals.
These deals help us reduce the capital expenditure per location,
de-risk the initial financial performance and improve financial
returns. This investment in growth continues to broaden and deepen
our geographic network and build further resilience into the
business. As we did last year, we will provide further updates on
our pipeline visibility as we progress through the year.
Good mature performance
The performance of our mature business, representing
approximately 79% of our global portfolio of locations, also
remains strong. Revenues for these centres (which were opened on or
before 31 December 2014) were GBP467.8m in the three months to 31
March 2016, an increase of 2.7% at constant currency (up 5.7% at
actual exchange rates). This reflects both a solid underlying
revenue performance in our more established locations as well as
the continued maturation of the 439 locations added in 2014 which
joined the mature portfolio on 1 January 2016. Our mature portfolio
now comprises 2,203 locations.
Year-on-year mature occupancy for the three months to 31 March
2016 increased 1.6 percentage points on a like-for-like basis to
79.1%, reflecting the maturation of the 2014 additions where
occupancy has grown strongly as expected. Overall, mature profit
margins remain strong and ahead of the prior year.
Summary
We are pleased with the performance of our business which
remains in line with management expectations.
We remain confident in the long-term structural drivers of our
industry and our investments are continuing to deliver attractive
returns well ahead of our cost of capital.
Our mature business continues to generate strong levels of
profitability and cash flow. We continue to see attractive
opportunities to reinvest in building our business, which, we
believe, will deliver further long-term shareholder value.
The newer locations in our portfolio are progressing towards
maturity in line with our expectations. We continue to take a
rigorous approach to risk management across every aspect of our
business including ensuring that our new locations deliver the
financial returns that we seek.
We remain focussed on delivering greater operational rigour and
efficiency. In particular, we believe that the important
operational changes we have implemented this year will help us
deliver further scale benefits.
Whilst we are vigilant about the overall macroeconomic
environment, we remain confident in delivering a full year result
in line with management's expectations given the benefits from our
new field and management structure and current trading
performance.
1 Underlying cash generation is cash generated before the
investment in growth capital expenditure, dividend payments, the
purchase of shares and asset disposals
2Net capital expenditure in new locations equals gross capital
expenditure less any contributions received towards fit-out
costs
Capital Expenditure Q1 2016 Q1 2016 Q1 2016
(GBPm) New Locations Maintenance Total
--------------------------- --------------- ------------- --------
Gross Capital Expenditure 51.6 16.0 67.6
--------------------------- --------------- ------------- --------
Net Capital Expenditure 39.5 11.7 51.2
--------------------------- --------------- ------------- --------
3Consolidated co-working seats / workstations as at 31 March
2016 were 421,491 (31 December 2015: 410,798)
Conference call details
Regus will be hosting a call for analysts and investors at 08.30
BST this morning. Details are set out below:
Dial in number: +44 (0) 1452 555 566
Conference ID: 95768460
There will also be a replay facility available for 7 days after
the call (until Tuesday 10 May, 9.30am):
Dial in number: +44 (0) 1452 550 000
Playback ID: 95768460
For further information, please contact:
Regus plc Tel: + 352 22 9999 5160 Brunswick Tel: + 44 (0)
Mark Dixon, Chief Executive Officer 20 7404 5959
Dominik de Daniel, Chief Financial Rosheeka Field
Officer & Chief Operating Officer Oliver Sherwood
Wayne Gerry, Group Investor Relations
Director
This trading update contains certain forward looking statements
with respect to the operations of Regus. These statements and
forecasts involve risk and uncertainty because they relate to
events and depend upon circumstances that may or may not occur
in 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.
----------------------------------------------------------------
About Regus
Regus is the world's largest provider of flexible workspace
solutions, with a network of 2,800 locations across 106 countries
and 977 cities, serving 2.3m members. Our customers include some of
the most successful entrepreneurs, individuals and multi-billion
dollar corporations.
Through our range of office formats, as well as our growing
mobile, virtual office, and workplace recovery businesses, we
enable people and businesses to work where they want, when they
want, how they want, and at a range of price points.
More information is available at www.regus.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTLLFETEAIFIIR
(END) Dow Jones Newswires
May 03, 2016 02:01 ET (06:01 GMT)
Regus (LSE:RGU)
Historical Stock Chart
From Mar 2024 to Apr 2024
Regus (LSE:RGU)
Historical Stock Chart
From Apr 2023 to Apr 2024
