Fears of a recession threaten to slow the recovery of the world’s largest provider of flexible office space.
IWG shares fell as the group reported a higher-than-expected half-year loss and Barclays, the home broker, lowered its full-year expectations.
The office company posted a loss of £70 million for the six months, compared to a loss of £163 million a year earlier.
The company’s burgeoning debt has also been a concern for some investors
But the latest loss was worse than Barclays had estimated and the heightened prospects of a recession in IWG’s key markets in Europe, the US and Asia would likely reduce demand for new office space and ultimately weigh on profits, the bank warned.
The Barclays note sent its stock up 11.4 percent, or 22p, to 171p.
The company’s rapidly growing debt burden was also a concern for some investors. Debt had risen to £7.2bn by the end of June, from £6.8bn a year earlier and there is still no sign of the company returning to paying dividends as the economic outlook remains cloudy and the war in Ukraine continues. continues.
“Of course we are not yet winning the battle with investors, but in the long term we hope to do so,” said CEO Mark Dixon.
The British Retail Consortium brought some happy news to beleaguered retailers, but it wasn’t enough to boost their share prices.
The monthly survey found that retail sales value rose 2.3 percent in July, though that was largely due to rising inflation.
The warm weather has boosted the usual summer frenzy for holiday wear, but with utility bills skyrocketing, “summer could be the calm before the storm,” warned Paul Martin, the British head of retail at business consultants KPMG.
Retail stocks such as JD Sports (5.1 percent or 6.85p to 126.7p) and Next (2.1 percent or 136p to 6424p) struggled.
Home builder Bellway tried to provide a ray of hope in the macroeconomic gloom when it reported double-digit revenue growth.
In a trade update ahead of the publication of preliminary results in October, the Newcastle-based builder said housing revenues for the year to the end of July 2022 were up 13 percent year over year to a record £3.5 billion.
Bellway’s results pointed to the resilience of the housing market in the face of construction cost inflation and fears of an imminent recession. But despite early gains, the stock closed 2.3 percent, or 53p, at 2288p.
Holiday Inn owner Intercontinental Hotels, meanwhile, said demand for leisure and business travel has returned as Covid restrictions are eased around the world. IHG reported a 52 percent increase in group sales to £1.5 billion in the six months to the end of June.
And profits more than doubled to £299 million over the period. But despite this, stocks ended the day up 1 percent, or 49p, to 4967p.
The FTSE 100 rose 0.08 percent or 5.78 points to 7488.15, but the mid-cap FTSE 250 fell 1 percent or 206.04 points to 19,912.40.
BP and Shell were picked up by higher crude oil prices. The price of a barrel of Brent oil rose by about 1 pc. despite reports that Iran would be willing to increase its oil production if the US lifted its blockade on Iran’s nuclear ambitions.
BP climbed 1.5 percent or 6.25p to 422.55p and Shell rose 1.1 percent or 23p to 2184.5p.
Banks were also on buyers’ shopping lists after Dave Ramsden, the deputy governor of the Bank of England, said it was “more likely than not” that interest rates should rise further.
Banks have more room to make higher profits when interest rates are high.
As a result, Standard Chartered gained 0.8 percent, or 5p, to 612.2p and HSBC rose 1.5%, or 8p, to 553.5p.
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