(Reuters) -Global office rental firm IWG (LON:IWG) reported a 34% jump in annual core profit on Tuesday amid robust demand for its flexible working spaces, but remained "cautious" in its outlook, sending the shares down about 5% in early trading.
Landlords have seen gradual growth in office space utilisation since mid-2023 as tenants wind back pandemic-linked remote working arrangements and employees switch to a hybrid-work model requiring presence in the office several days a week.
"While 2023 was a record year for both revenue and network size, we continue to see significant growth potential," CEO Mark Dixon said in a statement.
Still, analysts at Investec cut their core profit estimates for IWG's current financial year by about 5%, citing the group's continued investment in its digital platform Worka and cautious outlook.
Shares in the FTSE 250 firm slipped as much as 4.8% to 176 pence, and the stock was among the top percentage losers on the midcap index.
Headquartered in Switzerland, IWG operates in more than 4,000 locations across over 120 countries and reported an 8% rise in annual group revenue to 2.96 billion pounds ($3.75 billion).
The London-listed owner of the Spaces and Regus brands said core profit was 403 million pounds for the year ended Dec. 31, against LSEG average analysts' estimates for 397.6 million pounds.
The company, which said in December it would resume regular dividend payouts, proposed a final dividend of one pence per share.
($1 = 0.7888 pounds)