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UPDATE 1-Regus profit rises 72 percent, shares jump
March 5, 2013 / 9:50 AM / 5 years ago

UPDATE 1-Regus profit rises 72 percent, shares jump

* Full-year pretax profit 85.1 mln stg

* Revenue up 7 percent to 1.24 bln stg

* Raises dividend to 2.2 pence per share from 2 pence

* Shares rise 10 pct (Adds CEO and analyst comments, updates share movement)

By Karen Rebelo

March 5 (Reuters) - Regus Plc reported a 72 percent rise in full-year profit as demand increased for its ready-to-use offices from companies looking to cut costs, sending its shares up as much as 10 percent.

Regus, which rents out business lounges and meeting rooms to clients for as short as half a day, has weathered the downturn in UK’s commercial property market by expanding globally.

The company has benefited from strong demand for flexible workspaces in the United States, its largest market.

Regus Chief Executive Mark Dixon told Reuters that its biggest customers were consumer goods and technology companies.

“Companies that are with new technologies want to remain very virtual. They don’t want to pick up heavy overhead.”

Regus, whose customers include Google Inc, GlaxoSmithKline Plc and Nokia, said it expected to add at least 350 centres in 2013.

Sixty-four of these belong to MWB Business Exchange Plc , which Regus plans to acquire.

The company raised its offer last month to buy its smaller rival to thwart a counterbid from Hong Kong-based investment fund Pyrrho Investments.

A majority of the new centres will be opened in the United States and Asia, Dixon said.

“We like that this business is on the front-foot for growth, a rarity in the sector at present,” Investec Securities analyst Andrew Gibb said in a research note.

“There is a sense of confidence in the outlook statement, with the strategy of improving margins in the mature business alongside investment for further growth,” Gibb added.

Pretax profit rose to 85.1 million pounds ($128.3 million) in 2012 from 49.4 million pounds a year earlier. Revenue increased 7 percent to 1.24 billion pounds.

Analysts on average had expected a pretax profit of 82.9 million pounds and revenue of 1.26 billion pounds, according to Thomson Reuters I/B/E/S.

Shares in the FTSE 250 company were up 8 percent at 140.66 pence at 0942 GMT on the London Stock Exchange. They touched a six-year high of 142.8 pence earlier. The stock had risen about 21 percent in the 12 months to Monday’s close. ($1 = 0.66 British pounds) (Reporting by Karen Rebelo in Bangalore; Editing by Joyjeet Das)

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