Regus posts rise in turnover but profits take a hit

published 3 May 2012

Regus, the flexible workspace provider, has reported a rise in turnover for the first three months of 2012 following a strong performance by its mature business.

Group turnover increased by 8.8% to £299.3m in the first quarter, from £275.1m in the corresponding period last year. The firm's mature business centres saw an increase of 4.4% in revenue to £282.2m, compared to £270.2m in the same quarter in 2011. Revenue per occupied workstation increased 1.4%, or £26, to £1,883 at constant currency rates and 1.0% (up £19) at actual rates.

During the three-month period the company opened 37 new centres, increasing the number of workstations by around 4,000. Another 200 new centres are planning for the rest of the year. However, Regus warned that as expected the accelerated pace of new centre openings since the second half of 2011 has weighed on profitability in early 2012. The financial drag from new centres is expected to diminish during the remainder of the year.

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"As a result of the accelerated opening programme and associated start-up losses, our net cash position declined by £18m to £170m at 31 March 31st 2012, in line with our expectations," the firm said.

"Overall, our business has demonstrated continued resilience and flexibility in the face of challenging market conditions and we are comfortable with our plan to invest further to accelerate growth. As always, however, we are ready to scale back our growth plans if macro-economic conditions were to deteriorate.

"Looking forward to the rest of 2012, management remain confident that the business is executing a clear strategy which is delivering in line with our expectations."

The share price fell 0.46% to 109.30p by 09:09.