The boss of the flexible office company IWG played down a 17% drop in its share price on Tuesday as “not rational”, arguing that economic uncertainty around the world is supporting demand for hybrid workspace.
IWG, which owns the Spaces and Regus brands, said its adjusted profit rose by 6% to $262m (£194m) for its first half of the year, but its shares plunged after it told investors it expected adjusted profit to end 2025 at the lower end of previous guidance of $525m-$565m.
Mark Dixon, the IWG chief executive, who owns 25% of the £1.9bn business, has seen the value of his personal stake drop by £96m.
“It is a strange reaction on the share price. It looks like it is machines selling … it is not rational,” he told the Guardian.
IWG has been growing at speed in recent years, after the pandemic revolutionised working patterns and demand for flexible office space. However, economic uncertainty is now the main driver behind demand, according to Dixon.
“It is a pretty volatile world out there,” he said. “In the UK, it is a difficult economy … companies need to keep flexible and have no [capital expenditure] as you don’t know what the economy has got to hold.
“It is globally similar. Even for Americans it is very volatile, people are acting in a conservative way.”
IWG had 220,000 rooms open across its portfolio in the first half, up 43% compared with the same period last year. It also announced a new share buy-back target of at least $130m for 2025, up from an earlier goal of $100m.
Prior to the fall on Tuesday, IWG shares had risen by more than 40% since the start of the year. The stock is still up by 19% in the year to date.
Last year IWG, which is headquartered in Switzerland, faced pressure from one of its leading shareholders to swap its London stock market listing for the US. Dixon added that such a move was not currently a priority was something that was considered “from time to time”.
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“If there is a better multiple and more liquidity we may consider it,” he said.
IWG is one of the biggest office space providers in the world. Dixon has been chief executive of the business since he struggled to find an office to rent for his own business in Brussels in 1989.