Workspace Group (WKP) H2 2024 earnings summary

Executive summary

• Achieved strong trading performance with like-for-like rent roll up 10%, trading profit up 9%, and total dividend up 9% year-over-year.

• Portfolio consists of 77 properties, 4.5 million sq ft of lettable space, and 4,000 diverse SME customers.

• Customer demand remained resilient, with over 100 deals per month and stable occupancy around 89–90%.

• Sustainability initiatives advanced, with 52% of space EPC A/B rated, 100% renewable electricity, and significant progress on 2030 environmental targets.

• CEO transition announced, with Lawrence Hutchings to succeed Graham.

Financial highlights

• Net rental income up 8% to £126.2 million; underlying net rental income up 10%.

• Trading profit after interest up 9% to £66 million.

• Adjusted EPS up 8% to £0.341; full-year dividend up 9% to £0.28, fully covered.

• Property valuation decreased by 9.5% to £2,446 million, resulting in a loss before tax of £192.8 million.

• EPRA NTA per share at £8, down 13.7% year-over-year.

Outlook and guidance

• Expect further rental growth from reversionary pricing and project activity.

• Capital expenditure guidance of £60–70 million, largely offset by disposals.

• Anticipate lower interest costs due to reduced debt and likely rate cuts.

• Projected 6% annual rent roll growth over the next 3–4 years from reversion and project completions.

• Well positioned for sustainable income and trading profit growth, underpinned by reversion and value-add projects.