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Share Price:
Down 313.60p
Change Today:
Market Cap:

IWG flips Japan business via ?320m franchise deal

By Oliver Haill

Date: Monday 15 Apr 2019

LONDON (ShareCast) - (Sharecast News) - IWG continued its shift towards an asset-light model on Monday with a 320m deal to sell 100% of its Japanese serviced office space to Tokyo-listed TKP Corporation, with which it has agreed a franchise agreement.
Once the deal is complete, which is expected next month, TKP will pay the full sum in cash and under the franchise agreement will operate the Japanese centres with full rights to use IWG's Regus, Spaces and OpenOffice brands.

In what is IWG's first master franchise deal, TKP has also committed to a development plan which will add "significant" more space to the centre network in the country, while the FTSE 250 group will provide its operating platform in return for a fee.

The divested Japanese business contributed 94.4m revenue to IWG last year and generated EBITDA of 20.6m, with its total gross asset value just over 98m as of 31 December.

Around a third of IWG's space growth last year came from similar capital-light routes of licensing the brands to landlords and management aim for the group's business model to eventually shift so that two-thirds of its space is available via franchises.

IWG shares shot up 20% to an eight-month high of 330p in early trade on Monday morning.

"IWG has sold its first franchise," said analysts at Peel Hunt, with the price of 3.4 times revenue "far higher than our best case" which had been for 1.5 times on average across the group.

"Given that our best case valuation was 701p for the whole group, the question is how far should investors extrapolate," the analysts added, moving their target price to 400p from 351p.

Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.


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

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What The Brokers Say

Strong Buy 5
Buy 1
Neutral 4
Sell 0
Strong Sell 0
Total 10
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