UK's IWG retains annual, medium-term forecasts on cost-cut boost

Aug 11 (Reuters) - British office-space provider International Workplace Group said on Tuesday cost-cuts would boost results in the second half of the year and beyond, helping it reiterate its 2026 and medium-term outlook despite macroeconomic uncertainty.

Here are some more details:

• IWG, which owns the Spaces and Regus brands, has been tackling higher debt and costs in the wake of the Middle East conflict and workplace changes linked to AI.

• The company maintained its 2026 outlook of adjusted core profit between $585 million and $625 million, amid accelerating centre signings and rising customer enquiries.

• IWG also said that it expects overheads to reduce significantly in the second half after cash flow before corporate activities stood at negative $55 million in the first half.

• The company's adjusted first-half core profit edged up 1% to $265 million while system-wide revenue increased 11% to a record $2.4 billion.

• "Despite guidance for 2H FCF to be ahead of last year's reported numbers, we expect FY FCF expectations to fall significantly, which we expect to be the focus today and a headwind for the shares," Jefferies analysts said in a note.

• They added that this could also reduce confidence in the timing of further share buybacks by IWG.

• In June, IWG increased its share buyback programme by $50 million, taking the total to $150 million.

(Reporting by Neeshita Beura in Bengaluru; Editing by Janane Venkatraman and Mrigank Dhaniwala)