Workspace Group (WKP) H2 2024 earnings summary

Executive summary

• Achieved strong trading performance with like-for-like rent roll up 10% and trading profit after interest up 9% year-over-year.

• Customer demand remained resilient, with over 100 deals per month and stable occupancy near 90%.

• Portfolio comprises 77 properties and 4.5 million sq ft of lettable space, serving 4,000 diverse SME customers.

• Sustainability initiatives advanced, with 52% of space now EPC A/B rated and 100% renewable electricity secured.

• CEO transition announced, with Lawrence Hutchings to succeed Graham Clemett.

Financial highlights

• Net rental income increased 8% to £126.2 million; underlying net rental income up 10%.

• Trading profit after interest rose 9% to £66 million.

• Adjusted EPS up 8% to £0.341; full-year dividend up 9% to £0.28, fully covered.

• Property valuation decreased by £255 million (down 9.5%), resulting in a loss before tax of £192.8 million.

• EPRA NTA per share at £8, down 13.7% year-over-year.

Outlook and guidance

• Expect further rental growth from reversionary pricing and project activity.

• Capital expenditure guidance of £60–70 million, largely offset by disposals.

• Anticipate lower interest costs due to reduced debt and likely rate cuts.

• Forecast 6% annualized rent roll growth over the next 3–4 years from reversion and project completions.

• Well positioned for sustainable income and trading profit growth, underpinned by reversion and value-add projects.