Regus sees a lift in office space market

OFFICE rentals specialist Regus said yesterday sales and profits were growing as businesses hunted for temporary space amid global economic uncertainty.

The company’s January to June pre-tax profit before exceptional items was £13m compared with £9.7m last year. Revenue grew 10 per cent to £565.6m.

Regus, which offers ready-to-use offices for rentals as short as half a day, said occupancy at its centres opened before January 2010 – was at a record level of 86.7 per cent.

Chief executive Mark Dixon said: “That [higher occupancy] is a result of more and more companies changing the way they work and starting to take up flexible workings, in particular large corporations.”

The company, whose customers include GlaxoSmithKline, Google and Starbucks, raised its interim dividend six per cent to 0.9p and said it was on track to meet its full-year expectations.

“We expect to see the level of growth increase in the second half as we are still seeing very healthy levels of demand with more companies looking to cut costs and move to flexible working and we will need to open up centres to supply to that demand,” Dixon said.

The company, whose net cash stood at £197.8m at the end of the first half, said it would continue to look at investing in new centres. Regus currently has centres in 88 countries.

It also named Dominique Yates as chief financial officer, replacing Stephen Gleadle as of Thursday.

In March, the company reported a 67 per cent drop in earnings but said expansion and cost-cutting will return it to growth in 2011. Regus last year had invested £70m in opening 125 new centres and moved into seven new countries.