Shares in hybrid workspace operator IWG Plc traded lower early on Tuesday despite reporting a 4% rise in system-wide revenue to $1.1bn for the third quarter, as investors weighed a rise in net financial debt and the impact of accelerated share buybacks.
IWG said net debt had increased over the quarter, driven by the repurchase of 16.7m shares for $47m under its buyback programme. However, it reiterated that net debt was expected to fall in Q4, in line with guidance, and confirmed that $173m of its 2027 convertible bond would be repaid in December using existing liquidity.
IWG said managed and franchised system-wide revenue was up 36% year-on-year in the third quarter and stated recurring management fees had surged 83%. Company-owned centres saw occupancy climb while also maintaining revenue per available room.
The FTSE 250-listed group signed 335 new locations in Q3, up from 234 a year earlier, and opened 215 centres, up from 152.
IWG also said it had returned more than $100m to shareholders so far in 2025 and stated that it remains on track to deliver at least $130m in buybacks and $140m in total shareholder cashflow for the year. Full-year guidance was unchanged, with adjusted underlying earnings and net debt expected to meet internal expectations.
Chief executive Mark Dixon said: "I am pleased with the financial results in the third quarter of 2025. The incremental investment we have made in our managed and franchised segment has already led to an acceleration in the number of locations we have opened and added to the pipeline as we continue to expand our network and coverage.
"The evolution of occupancy and pricing sets us up well for further growth in the remainder of the year and into 2026. Operational cash generation is enabling the ongoing share buyback."
As of 0845 GMT, IWG shares were down 1.45% at 217p.
Reporting by Iain Gilbert at Sharecast.com