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Prices & Quotes - UK Markets - IWG (IWG)

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Share Price:
Down 313.60p
Change Today:
-5.20p
Market Cap:
3,159.11m

IWG's franchising move could release 'a lot of value', says Peel Hunt

By Iain Gilbert

Date: Thursday 11 Apr 2019

LONDON (ShareCast) - (Sharecast News) - Analysts at Peel Hunt upgraded serviced offices provider IWG to 'buy' from 'hold' on Thursday, noting that the group's move to franchising out parts of the business could release "a lot of value".
The broker said chief executive Mark Dixon's new strategy, which entailed selling-off parts of the business, made sense, with franchising out whole parts of its operations in exchange for cash upfront, management fees and a commitment to invest looking set to extract more value.

Peel Hunt, which also lifted its target price on IWG to 351p from 190p, noted that while it was still early days, if Dixon was right, IWG's share price could "more than double".

"Thus far, the talk of a move to franchising has remained just that, talk," said Peel Hunt.

IWG had been talking about enhancing returns and reducing risks by moving to a partnership model "for over a decade" without it ever becoming anything more than talk, Peel Hunt analyst Andrew Shepherd-Barron said.

"But this time it looks more serious, and we estimate it could take full value up to a heavily caveated 701p per share," he added.

IWG's recent frustration with how it has been perceived by investors and, as a result, the low valuation it has been slapped with, was seen as another factor that might help plans to move towards a franchise model finally cristalyse.

"By low valuation, it means in particular that insufficient credit has been given to its ability to generate free cash flow."

Peel Hunt also believes that, if IWG was to move ahead with the strategy, returns to franchisees on cash invested in growth could, on a levered basis, rise to high-teen percentages, which the broker believes would be attractive for potential franchisees.

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IWG Market Data

Currency UK Pounds
Price 313.60p
Change Today -5.20p
52 Week High 383.60p
52 Week Low 222.60p
Volume 1,222,596
Shares Issued 1,007.37m
Market Cap 3,159.11m

Performance Indicators

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What The Brokers Say

Strong Buy 5
Buy 1
Neutral 4
Sell 0
Strong Sell 0
Total 10
buy
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

IWG Dividends

  Latest Previous
  Interim Final
Ex-Div 05-Sep-19 25-Apr-19
Paid 04-Oct-19 24-May-19
Amount 2.15p 4.35p

Trades for 30-Jul-2021

Time Volume / Share Price
16:35 609,857 @ 313.60p
16:29 323 @ 315.50p
16:29 182 @ 315.50p
16:29 129 @ 315.50p
16:29 425 @ 315.50p

IWG Key Personnel

Chair Douglas Sutherland
CEO Mark Dixon
CFO Glyn Hughes