Oct. 29--Shares in Regus today fell 4 percent after the serviced office group warned full-year results will be hit by extra spending as it ramps up expansion, with up to 440 new centres opening this year.
The remote working proponent, which rents out meeting rooms and business lounges as well as office spaces to firms including Google, BMW and GlaxoSmithKline, said it plans to open between 420 and 440 extra centres, up from its previous estimate of 350.
"While this will lead to additional opening costs and initial operating losses which will impact the group's full- year results, we remain confident that our strategy to make significant investments this year will drive future revenues, profit and cash flow," Regus claimed. "We expect the fourth quarter to represent the heaviest quarter of new centre additions."
Expansion so far _ the company now has 1,687 centres and 288,406 "workstations", up from 1,605 and 277,216 respectively in June _ helped the Luxembourg-headquartered company's turnover jump 25.5 percent to pounds sterling 386.6 million in the three months to October. That was an acceleration on the growth rate earlier in the year: for the nine months to October, Regus' revenues rose 22.4 percent to pounds sterling 1.1 billion.
Regus it is also developing its "Third Place" format, opening office space in informal areas such as coffee shops, clubs, and libraries, and has signed deals with motorway service station operators Welcome Break, Moto and Roadchef this year. It said this would "further enhance the convenience of our network of workplaces for all our customers, whose number reached 1.5 million in September."
It has invested pounds sterling 241 million in new centres since January, and extended its revolving credit facility by pounds sterling 120 million to pounds sterling 320 million, as well as increasing support from existing banks and agreeing terms with new lenders.
Shares fell 9.1p to 195.7p.