Workspace Group (WKP) H1 2025 earnings summary

Executive summary

• New CEO Lawrence Hutchings introduced, emphasizing a customer-centric approach and a scalable platform supporting London's SMEs in a structurally growing market.

• Ongoing investment in asset upgrades, sustainability, and subdivision of larger units to meet demand for smaller spaces.

• Business activity remains robust, with high levels of customer engagement and dynamic sales performance, including 140 viewings and 25 lettings in a single week.

• Portfolio valuation stabilised, down 0.8% to £2,423m; like-for-like valuation down 0.2%.

• Customer demand remained strong with 603 lettings and rent per sq. ft. up 2.8% to £47.00.

Financial highlights

• Trading profit after interest up 5.1% to £32.7m; adjusted earnings per share increased 5% to 16.9p; interim dividend up 4.4% to 9.4p.

• Net rental income: £60.5m (down 0.8% year-over-year); underlying net rental income: £60.2m (up 4.3%).

• EPRA NTA per share £7.85 (down 1.9% from March 2024); property valuation stable at £2,423m.

• Loan-to-value at 35%; net debt stable at £856m.

• Profit before tax: £10.2m, reversing a £147.9m loss last year.

Outlook and guidance

• Focus on driving occupancy and rent roll in H2; much of rental growth from refurbishments expected in next financial year.

• Planned CapEx of around £30m, largely offset by disposals.

• Interest costs expected to remain broadly stable with 89% of debt fixed or hedged.

• Longer-term outlook anticipates significant earnings and dividend growth, supported by project pipeline and SME market expansion.

• £36m of reversionary potential identified, with an expected 26% increase in rent roll over the next 3-4 years.