Given the economic woes and the dismal state of the property market in the first half of this year, you might have thought that prime office space supplier Regus would have taken a knock. In fact, it seems to be in relatively good shape. In the first half of this year, Regus opened a further 23 centres, increasing the number of workstations available by almost 8%. And what’s more, Regus boss Mark Dixon told The Evening Standard that occupancy levels in the City were running at an impressive 90%, thanks largely to recently-redundant financial workers deciding to start their own ventures. It seems stricken bankers may have their uses after all…
There’s no doubt that this has been a tough year for Regus – despite some encouraging signs, its overall financial results for the six months to June were a bit of a mixed bag. Revenues were up almost 10%, but analysts reckon that if you strip out currency fluctuations, Regus actually saw a decline of almost 7%. There was also a notable decline in operating profits, which dropped by over 8%.
However, bosses needn’t lock themselves in their nearest serviced office just yet. To be able to report profits of £68.4m in a market like this is by no means a disaster. Nor are the surprisingly high occupancy levels at its 14 centres in the City, which CEO Mark Dixon puts down to jobless ex-financial services staff going out and setting up new businesses. That’s good to hear, and you can see the logic – for entrepreneurs wanting to keep start-up costs low, renting flexible office space on a week-by-week basis can be a sensible solution.
That said, Regus clearly can’t afford to rest on its laurels, which is why Dixon’s planning a whole raft of cost-cutting measures in the second half of the year. Regus employees may be forgiven for feeling a little nervous – unfortunately, it sounds like redundancies might be on the cards in markets where Regus office space isn’t performing as well as expected. Perhaps they should start thinking about new entrepreneurial ventures too.
In today's bulletin:
Summer sucker Punch
Persimmon boost as housing market recovery continues
Stricken bankers-turned-entrepreneurs rescue Regus?
Managing a recruitment business through the recession
FDs want to scrap your perks