Workspace Group says customer enquiries increased sharply in June

Written by: Wajeeh Khan
July 9, 2020
  • Workspace Group says customer enquiries increased sharply in June.
  • The office space provider has £161 million of cash & undrawn credit facilities.
  • The British company opened 2 new business centres last month.

Workspace Group (LON: WKP) expressed confidence on Thursday that customer enquiries recovered quickly in June as the British government started to ease Coronavirus restrictions. The office space provider, however, still forecasts occupancy levels to remain under pressure in the short term. In the first quarter that ended on 30th June, Workspace posted £16 million in loss.

According to CEO Graham Clemett of Workspace Group:

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

“As our existing customers review their space requirements, we have seen like-for-like occupancy fall by 3% to 90% in the quarter, and we expect to see continued pressure on occupancy levels in the short term.”

Shares of the company slumped roughly 2% on market open on Thursday but recovered the loss later on. At 628 pence per share, Workspace Group is currently a little under 50% down year to date. Learn more about why do prices rise and fall in the stock market.

Workspace has £161 million of cash and undrawn credit facilities

Workspace concluded the recent quarter with £546 million of net debt and £161 million of cash and undrawn credit facilities. As tenants started returning to offices, the company said that activity was now at roughly 15% as compared to normal levels.

The countrywide lockdown that started in March resulted in companies resorting to work from home arrangements. Consequently, office-space providers, including Workspace Group, struggled with occupancy rates in recent months. Workspace Group reported a 47% decline in annual pre-tax profit due to COVID-19 restrictions in the first week of June.

As per the London-based company, customer enquiries jumped from 272 in April to 765 in June. The customer base of Workspace currently comprises more than 3,000 businesses, including prominent names like Nutmeg, Huge Boss, and Bloom & Wild. In the first quarter, the real estate investment trust said, customer enquiries tanked by over 50% amidst the lockdown while lettings came in about 64% lower.  

Workspace offered a 50% discount on rents in March

Workspace introduced a 50% discount on rents in March when the government imposed a countrywide lockdown. The offer, it commented on Thursday, ended in June.

The FTSE-250 listed firm is a staunch competitor of Soho, NY-based WeWork. The group highlighted to have opened 2 new business centres last month. It also anticipates an additional three projects to be completed before the end of the ongoing financial year.

At the time of writing, Workspace Group is valued at £1.14 billion and has a price to earnings ratio of 15.81.