Regus, the current market leader in the Serviced offices sector have posted their results for 2009 – Their UK workstations have increased but profits have dropped along with their occupancy. The focus for 2010 will be to expand but to consolidate the loss making business centres, thus making the business more profitable. They current economic climate means that Regus will be putting pressure on their suppliers to drive down costs.
The UK Section from their CEO statement
“Conditions during 2009 continued to be extremely challenging with renewed pressure on key performance indicators and particularly price. Set against this backdrop, the region delivered revenues of £191.4 million – down 13.3% on 2008 and achieved an average mature occupancy of 80% (2008: 83%). During the year, we opened 10 business centres which contributed to the increase in the average number of consolidated workstations from 30,899 in 2008 to 33,528 in 2009.
Looking ahead we will seek to address the performance of our loss making centres in the UK by both focusing on driving up revenues through targeted marketing and new product initiatives as well as seeking cost reductions. Allied to this, we are restructuring part of our UK business having regard, of course, to the interests of all concerned. Like many other companies with operations in the UK, we are seeking to renegotiate a small number of leases where this is critical to improving a centre’s performance and where the historic rent is not reflective of current market conditions. We very much hope the restructuring can be achieved consensually but in the event that this is not possible other measures may be necessary.
However we remain fully committed to developing the business and growing our leadership position in the UK. We will therefore continue to pursue low risk growth opportunities to expand and are contracted to open six centres in the next two months.”
Regus will continue to grow but will find it harder and harder to keep the occupancy high as smaller companies enter the market and seize on the competitive advantage.
