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I'm in at 234 today
Results read well. Presenting the numbers under both accounting standards was welcome as IFRS16 is a nightmare.
Another sparkling set of results, including the disclosure of numerous potential franchise deals.
HQ (IWG brand) have increased the monthly cost of my business's Virtual Office Service from £ 24.91 to £29.00/month, that's a 16.4% increase. Obviously think they have pricing power.
i don't think you can base their PE on last years operating profit, the sale of franchises changes the numbers in a big way that has only started in the last 6 months operating profit should also continue to improve after this year once they've tidied up their inventory which will always be work in progress but this year more so. Softbank were pouring billions into this space because it is clearly a disrupter to traditional office leasing with massive growth potential but i refer back to Dixons comment re Softbank - WeWork 'right bet - wrong execution'
PE Anywhere between 32-37. You can google it. It has been rising up to this current year and is set to fall according to some forecasts to around 20 over the next few years. How anyone can accurately forecast this when there are still deals to be done on the franchises I'm not sure. Lets say its peaked anyway. I guess the US deal or lack of it and to some degree the debacle that is Weworks is currently stalling any price movement here.
Is IWG really on a PE of 30+? Cash flow seems to bear no relation EPS. The accounts for this business are difficult to understand and IFRS16 has made things twice as tough!
Good post again jusl. Hope Masayoshi Son takes some consolation from Dixon's remark! I suppose in for a penny in for a billion or two
I don’t think there is anyone to compare with IWG given their size and geography
What will the PE of Iwg be next march when they report annual results they will have grown the business by 250 plus locations they’ve sold around 190 in 3 deals for around £450million they will probably make another £100 million in operating profit so that’s £550 million with 888 million shares in circulation that’s 62p per share, I think the market is oblivious to analysing quarterly numbers they make take notice on full year results
It is a mystery, but then isn't the market always. We gather pieces of evidence and often they have little to do with the sp. I know IWG is often compared to the insane valuation of Wework as making it good value. Is there any merit in comparing IWG to Workspace which has a PE ratio of just 13, whereas IWG's PE is 33. I suppose its good that the company can maybe speed up its repurchase scheme with shares at this level. Still someway to go with that.
After that update, I'm surprised to see this in the red when markets are having a good day.
AS Mark Dixon said re Softbank - Wework - it was the right bet but poor execution
SoftBank wrote down the value of its investment in WeWork by about $3.4 billion in the second quarter.
"The perception is that SoftBank is being dragged down into the quagmire of WeWork," said SoftBank's founder Masayoshi Son. "I am looking back with true regret about the mistaken investment moves that I have made."
Also wework has huge brand damage with investors and i cant see an IPO working anytime soon too much damage done, so more good money after bad for Softbank - IWG could be their route out
I don't think that's a bad call, lots of opportunity in a growing market very well positioned to move forward positive cash flow huge experience etc etc - wework has huge brand damage with customers and employees to sort our whilst dealing with big cash burn - Bill Ackman may have called it right - opportunity id say
Outlook, operational cash flow and debt reduction make this look very attractive. Not far off joining the FTSE100. Opened a position.
market reaction maybe down to broker sentiment Peel Hunt upgraded target yesterday to 500p on back of Swiss deal lowered it to 480p today probably because of rationalisation costs, all in all they are in a very strong position with lots of opportunity and very low debt leverage considering swiss money to come in and still carrying £150 million of owned property ,
yes all very positive - net debt down significantly - talk of the rationalisation of space delivering far better profits next year
Looking good revenue up occupancy up 400 franchise locations in the pipeline only downside is costs related to closures but they are doing it right
Very positive. Looking forward to permanently getting above 420p.
Another brick in the asset-lite wall announced today. Let's hope that puts us on a roll for tomorrow's trading update.
Many thanks jsul. They have made 29 purchasers since The latest buy-back program and already had a substantial amount in treasury. Think I've calmed down now. The discrepancy in the fundamental and share trades between ADFVN and LSE is quite absurd. LSE take up to six months to update some company info. Many investors seem to pay for and advise to get order book info. Thinking I might try it at some stage. I am pretty concerned about the state of global economies and unrest. 20 years ago the kind of news we get everyday now used to wipe billions off the markets, now it seems they only blink when Trump tweets. Gl all
the value of the buyback will be £100 million at say circa £4 a share that would be 25 million shares they are not buying back 100 millions shares, the value of the demerger by Pru & MG led to a sale of circa 11 million shares
Thanks 50Glass. Another 250,000 today, but it does not alter the rns statement about the buyback, Further to the interim results announcement earlier today, in which IWG plc ("IWG" or the "Company") announced its intention to commence a £100 million share buy-back programme. So they are now on target for a £400,000,000 buyback program. I think I would rather they had got the debt down. Unless they have some good deals to pull off soon to drive the sp up to nearer £5.00. Alas cracks beginning to appear in many companies in different sectors of global economy. As previously stated I think there will be some good buying opportunities by next April.
See today's RNS:
"Following the purchase, the total number of ordinary shares held as treasury shares is 34,325,596.
As at the close of business on 23rd October 2019, the Company had 923,357,438 ordinary shares (including treasury shares) in issue."