IWG sees debt rise as reports cash outflow and first-half pretax loss

International Workplace Group PLC on Tuesday raised its dividend despite posting a half-year loss and increased debt.

The Zug, Switzerland-based provider of hybrid workspace under Regus and other brands swung to a pretax loss of USD20 million in half-year ended June 30 from a USD12 million profit the year prior. Operating income dropped to USD38 million from USD68 million on-year.

The bottom line was hurt by higher selling, general and administrative expenses which rose 26% to USD315 million from USD250 million.

However, IWG said that following a period of increased investment, overheads are expected to reduce "significantly" in the second half which should strengthen cash flow. It expects cash flow performance in the second half of 2026 to be ahead of the prior year.

Cash outflows totalled USD55 million in the half-year compared to inflows a year prior. Given this, net debt increased to USD880 million from USD754 million.

Shares in IWG were marked down 3.1% at 179.90 pence each in London on Tuesday morning.

System-wide revenue increased to 11% USD2.40 billion from USD2.16 billion with group revenue of USD1.97 billion, up 6.5% from USD1.85 billion.

System-wide revenue is the total made by every single workspace in the IWG network, including partner and franchise locations. Group revenue includes sales from company owned sites, and service fees from partner centres.

IWG said the Managed & Franchised segment now represents 22% of system-revenue, up from 18% a year ago, and 32% of all open rooms, up from 25% a year ago.

"Our strategy remains clear. We continue to expand our global coverage at pace, building an unrivalled network that extends from the world's largest cities to smaller towns and regional markets," said Chief Executive Christian Schmitz.

Expectations for 2026 remain unchanged.

IWG expects adjusted earnings before interest, tax, depreciation and amortisation of USD585 million to USD625 million, company-owned revenue growth of at least 4% and recurring management fee income of USD80 million.

Adjusted Ebitda was USD265 million in the first half, up marginally from USD262 million the year before. In 2025, IWG reported adjusted Ebitda of USD531 million.

A dividend of USD0.48 per share was declared, compared to USD0.45 a year ago.

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