Investec upgrades Regus after pre-tax profit more than doubles
Analysts at Investec upped their rating for Regus from ‘hold’ to ‘buy’ after the office space provider more than doubled its interim pre-tax profit.
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Shares in Regus were up by 8.43% to 271.20p at 1507 BST after the office provider said return on investment had improved to 23.1% from 20.9%.
Investec reiterated a 295p price target but said its recommendation changed as the share price had recently reversed.
“Overall, this was a solid update by Regus with the continued improvement in its post-tax cash returns on investment the key highlight,” the bank said.
Regus had strong underlying trading and its network investment was continuing to deliver good returns, Investec said.
Investec increased its 2017 profit before tax forecast by 6.9% to £216.6m from £202.6m and earnings per share to 18.5p from 17.3p, and said there was room for operational efficiency improvements.
The Share Centre analyst Ian Forrest said in a note it held a ‘buy’ rating on Regus.
“These are good figures from Regus as we believe they demonstrate respectable growth, despite some weakness in the global economic environment,” Forrest said.