IWG said it expects underlying earnings to be 'well below' those posted in 2020, as the recovery takes longer than expected.
Shares in IWG plunged more than 15% on Monday, after the world’s largest flexible-office company warned that underlying earnings in 2021 will be “well below” the previous year’s levels, as COVID-19 lockdowns and the emergence of new variants of the virus that causes the disease continued to hit its operations.
Shares in IWG IWG, -12.63% dropped 15.85% in early morning London trading on Monday. The stock has fallen 10.11% so far this year, according to FactSet.Flexible-office providers such as IWG have been hit hard by the pandemic, which has dramatically accelerated the shift to remote working. Last week, rival Workspace Group WKP, -0.61% said that a recovery to pre-pandemic levels will take a couple of years.
“Whilst there is scope for a material rebound in occupancy off a much lower cost base post all the network rationalization, ultimately, the group needs to deliver on material master-franchising deals to demonstrate upside value in the group, reducing capital employed and justifying a higher long-term multiple,” said the analysts in a research note to clients on Monday.
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