Office rental firm IWG warns profits struggling to recover

Office rental group IWG has warned that profits will be well below 2020 levels as the Covid-19 pandemic continues to affect its business.

But bosses said they remain confident that they will see a strong recovery next year and have seen unprecedented demand for flexible office space as companies adopt hybrid working.

The company said it has seen signs of improvements in the past six weeks or so – highlighting “occupancy momentum” in the US – but admitted it has been slower than hoped due to the prolonged impact of the crisis.

IWG said: “Accordingly, this will delay the anticipated recovery in our business” and warned it will have a “significant impact” on the group’s results for 2021.

The firm added: “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.”

Inquiries for space have reached pre-Covid levels and the latest warning over profits is “one of timing” that will soon improve, it said.