Office landlord IWG reports ‘unprecedented demand’ for hybrid working

The company’s US recovery has been strong, chief executive Mark Dixon said.

IWG said that it had stopped having to lure customers with Covid promotions (Matt Crossick/PA) (PA Wire)

Investors backed office group IWG on Tuesday as the business said it was seeing “unprecedented demand” for hybrid working and a strong recovery in the US.

The business said that it sold record amounts of office space in the US in June.

It also managed to win more than 900 new enterprise customers in the first six months of the year, showing high demand for hybrid working patterns, IWG said.

Things have been getting even better in recent months, with demand increases expected to carry into the second half of 2021.

“The significant move to hybrid working has created unprecedented demand for our flexible work products,” said the chief executive, Mark Dixon.

“This fundamental shift in the way people work is clearly a positive tailwind for IWG over the medium to longer term and we are seeing increasing levels of interest from enterprises wishing to transform their working practices.”

Revenue was 19% lower at just over £1 billion in the six months, but pre-tax loss narrowed from £237 million to £163 million, the company said.

“Whilst the pace of recovery remains dependent on the continuing easing of pandemic restrictions across our markets, we look forward to the second half with cautious optimism having implemented the necessary changes to our network and cost base,” Mr Dixon said.

“Looking further ahead, with the improvements we are observing in our operating environment, we remain confident of a stronger recovery in 2022.”

Shares rose through Tuesday morning following the news, and were up by about 3.3% a little before midday.

Since March, IWG has been able to ease away from the incentives it was offering customers during the pandemic.

It means that new customers being signed up will not get the discounts and Covid-19 promotions that were offered earlier in the year.