March 6, 2019 / 8:14 AM / 17 days ago

UPDATE 1-Office space firm IWG to close, modernise some sites to revive business

(Adds details on results, outlook, background)

March 6 (Reuters) - British serviced office space provider IWG Plc said on Wednesday it would close or refurbish some locations in certain markets, including the UK, to bring its performance back on track after reporting a lower full-year operating profit.

The Switzerland-based company behind the Regus and Spaces brand said it was looking to revive its UK operations, which has been hit by a weak property market in London and higher costs related to opening of new sites.

The company, which had warned on profit in June, reported a 5.6 percent fall in full-year operating profit to 154.1 million pounds ($202.39 million).

Total revenue rose 9.7 percent to 2.54 billion pounds.

“Overall, even taking the potential impact of Brexit into account, we remain positive about the medium to long-term future of the UK market,” the company said, adding that 2019 trading outlook was in line with management’s expectations.

The FTSE 250 company’s shares have fallen more than 20 percent after takeover talks with five separate suitors fell through in 2018.

IWG has also seen increasing competition in recent years. While Mark Dixon launched the company in 1989, start-up WeWork, founded just nine years ago, has been credited with updating the image of serviced offices by offering services such as beer on tap.

IWG, which rents out meeting rooms, business lounges and office space, also said its Brazil business would turn profitable in 2019 after a restructuring helped boost its size.

The company’s shares were down 2.4 percent at 225.5 pence. ($1 = 0.7614 pounds) (Reporting by Tanishaa Nadkar in Bengaluru; Editing by Shounak Dasgupta)

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