WORKSPACE GROUP PLC
HALF YEAR RESULTS
POSITIVE CUSTOMER MOMENTUM AND FOCUS ON GROWTH
OPPORTUNITIES AHEAD
Workspace Group PLC (“Workspace”), London's leading provider of flexible office space, today announces its results for the half year to 30 September 2021.
The results reflect a recovery in our trading performance and good momentum in customer activity. Our customers are returning to their offices and we're seeing strong new customer demand for flexible, well-located office space across London.
Financial highlights: Trading profit recovery, strong balance sheet
- Trading profit after interest† up 42.5% to £21.8m (30 September 2020: £15.3m) driven by 12.3% (£4.5m) increase in net rental income
- Property valuation of £2,271m, a small underlying decrease of 0.7% (£15m) from 31 March 2021
- Profit before tax of £3.4m (30 September 2020: £110.4m loss)
- Interim dividend reinstated at 7.00p per share (30 September 2020: Nil)
- EPRA net tangible assets per share down 1.1% to £9.28 from 31 March 2021
- Loan to value of 23% (31 March 2021: 24%) with £318m of available cash and undrawn facilities
Customer activity: Strong demand and improving customer utilisation
- Strong customer demand with enquiries, viewings and lettings now at pre-Covid levels
- Like-for-like rent roll up by 2.1% to £87.3m in the six months to 30 September 2021
- Strong growth in like-for-like occupancy, up 3.7% to 85.6%, with rent per sq. ft. stabilising in the second quarter, up 0.3% to £35.50 after a 2.3% decline in the first quarter
- Significant increase in customers returning to their offices, with utilisation of our centres reaching 60% of pre-Covid levels mid-week, and 55% over the week as a whole
- High levels of rent collection, with 97% of rents due for the first half received as at 9 November 2021
Portfolio activity: Expanding our footprint through sustainable asset management
- Strategic recycling of capital with the disposal of 13-17 Fitzroy Street for £92m and the acquisition of The Old Dairy in Shoreditch for £43.4m
- Acquisition announced today of former Victorian bus factory, The Busworks in Islington, for £45m, with significant potential to be sustainably upgraded and repositioned
- Extensive refurbishment of our 60,000 sq. ft. Pall Mall Deposit business centre in Ladbroke Grove completed in September 2021
- Mirror Works, a new 40,000 sq. ft. business centre in Stratford, launched in October 2021
- Two further projects to complete in the second half, providing a further 32,000 sq. ft. of new or upgraded space
- Healthy pipeline of refurbishment and redevelopment activity, projected to deliver 1.2m sq. ft. of new and upgraded space over the next five years
Commenting on the results, Graham Clemett, Chief Executive Officer said:
“We have seen a strong recovery in our trading performance in the first half of the year after successfully managing through the challenges of the last year. The speed and strength of that recovery has been fuelled by rising demand for our unique flexible offering, which is proving to be an attractive option for an increasing number of businesses in London as the way people work rapidly evolves. Now more than ever, space matters and businesses are making decisions about their offices based on what their people want – great space in interesting, convenient locations with top sustainability credentials.
All the signs point to strong underlying momentum in our business. Demand metrics continued to improve in the first half across London, utilisation of our centres is increasing, prices have stabilised and rent collection is strong.
We are building on this momentum through active management of our portfolio and have our sights firmly set on the exciting growth opportunities ahead as we continue to expand our property footprint. And, as sustainability becomes an increasingly important consideration for our business and our customers, our unique business model serves us well. We are focused on repurposing and investing in our portfolio of iconic buildings to make them greener and fit for our customer's changing needs. We revive communities by providing quality business space in a broad range of areas across the Capital and of course always acting responsibly with our customers, partners and those communities.
As our half year results show, those who predicted that the pandemic would lead to the end of the office are being quickly disproven. Our performance highlights that with the right space in the right locations and a flexible, customer-centric offering, businesses still believe they do their best work together. We are excited by the significant growth opportunities in front of us, and the plans we have in place to capture them.”