Regus expects investments to hit 2013 results

OFFICE space supplier Regus reported a 26 per cent rise in third-quarter revenue yesterday, but said full-year results would be hurt by the additional investments it was making to open new centres.

The company, which provides meeting rooms, business lounges and office spaces for rent, said it now planned to open between 420 and 440 new centres, up from its previous estimate of 350 centres.

Analysts at Goldman Sachs and Panmure Gordon cut their full-year earnings-per-share estimates for the company by 14 per cent.

“The higher number of centre openings has a £14m negative impact on our operating profit estimates as we expect them to initially make a negative contribution,” Goldman Sachs analyst Charles Wilson said in a note.

Wilson, however, retained a buy rating on the stock and said the shares provide “good exposure to a global cyclical recovery, despite the short-term cut to earnings”.

Regus said group turnover in the third quarter ended 30 September rose to £386.6m from £307.3m last year.

Regus, whose customers include GlaxoSmithKline, Google and Toshiba, said revenue per occupied workstation -- a key metric in the space rental business -- increased by 4.3 per cent to £1,920.

The company’s first-half profit had dropped three per cent due to restructuring costs related to the acquisition of MWB Business Exchange in February.

Regus’s shares in London closed up 0.5 per cent at 205.8p.