Workspace Group (LSE:WKP) has set a medium-term ambition to deliver, organically, annual trading profit before interest of over £125m as it repositions the business under a "Fix, Accelerate, Scale" strategy.
The London-focused owner and operator of flexible workspace says the plan will be funded by active disposals and targeted refurbishments to create a new Managed offer alongside its existing Space only product.
"We have an extraordinary portfolio of buildings in strong London locations, operating in markets with continued long-term structural demand," said Charlie Green, Chief Executive.
Net rental income fell 7.1% to £113.4m, underlying net rental income was £109.9m, trading profit after interest dropped 9.4% to £60.5m, and the group recorded a loss before tax of £120.5m primarily reflecting a reduction in property valuations.
Stabilised Portfolio occupancy was 81.6% at 31 March, rent per sq. ft. declined 2.1% to £46.31 and the rent roll fell 4.6% to £108.3m, while lettings and renewals produced £50.4m of rental value from 1,310 lettings and 558 renewals.
The group exchanged or completed £125.7m of disposals in the year, has exchanged two further properties for £6m in June, is in active discussions on a further £60.4m towards a £200m target and is considering more than £100m of additional disposals.
Leverage remained modest with loan-to-value at 35%, £242m of undrawn facilities and cash, and the £200m RCF maturity was extended by one year to June 2030, taking average facility maturity to 2.8 years on a pro forma basis.
Fitch has commenced coverage with a BBB- rating and stable outlook and notice has been given to S&P to terminate coverage.
Workspace has started major improvements at Salisbury House, Cargo Works, Edinburgh House and Centro Buildings as case studies to enhance amenities, prove the Managed offer and lift operational earnings.
The group will host a strategy update and FY results presentation for analysts and investors on 10 June at Salisbury House with a live webcast available.
