Recession fears take toll on office provider IWG

Fears of a recession have threatened to slow the recovery of the world’s biggest provider of flexible office space.

IWG shares took a tumble as the group reported a higher than expected half-year loss and Barclays, its house broker, slashed its expectations for the full year.

The office firm posted a loss of £70m for the six months, compared with a £163m loss a year earlier. But the latest loss was worse than Barclays had pencilled in and the increased prospects of recession in IWG’s key markets in europe, the Us and asia was likely to diminish demand for new office space and ultimately hit earnings, warned the bank.

The Barclays note sent its stock diving 11.4pc, or 22p, to 171p.

The company’s burgeoning debt was also a concern for some investors. Debt at the end of June had risen to £7.2bn from £6.8bn a year earlier and there is still no sign of the company returning to paying dividends while the economic outlook remains cloudy and the war in Ukraine rumbles on. ‘We’re obviously not winning the battle with investors yet, but over time we hope to do that,’ said chief executive Mark Dixon.

The British retail Consortium provided some cheery news for beleaguered retailers, but it wasn’t enough to boost their share prices.

The monthly survey revealed that the value of retail sales rose by 2.3pc in July although much of that would have been due to soaring inflation.

The warm weather encouraged the usual summer splurge on holiday clothes but with energy bills set to go through the roof ‘the summer could be the lull before the storm,’ warned Paul Martin, the UK head of retail at business consultants KPMG.

retail stocks such as JD Sports (down 5.1pc, or 6.85p, to 126.7p) and Next (down 2.1pc, or 136p, to 6424p) struggled.

Housebuilder Bellway tried to provide a bright spot in the macro-economic gloom as it reported double-digit revenue growth. In a trading update ahead of the release of its preliminary results in October, the Newcastlebased builder said housing revenue for the year to the end of July 2022 had climbed 13pc year-onyear to a record £3.5bn.

Bellway’s results pointed to the resilience of the housing market in the face of building cost inflation and the fears of a pending recession. But despite early gains, the shares closed down 2.3pc, or 53p, at 2288p.

Holiday Inn-owner Intercontinental Hotels, meanwhile, said demand for leisure and business travel has returned as Covid restrictions eased around the world. IHG reported a 52pc rise in its group revenue to £1.5bn in the six months to the end of June.

and profit more than doubled to £299m in the period. But despite this, shares ended the day down 1pc, or 49p, to 4967p.

The FTSE 100 inched up 0.08pc, or 5.78 points, to 7488.15 but the mid-cap FTSE 250 slipped 1pc, or 206.04 points, to 19,912.40.

BP and shell were snapped up on the back of higher crude oil prices. The price of a barrel of Brent crude rose by around 1pc despite reports that Iran would be prepared to increase its oil output if the Us removed its block on Iran’s nuclear power ambitions.

BP climbed 1.5pc, or 6.25p, to 422.55p and Shell rose 1.1pc, or 23p, to 2184.5p.

Banks were also on buyers’ shopping lists after Dave ramsden, the deputy governor of the Bank of england, said it was ‘more likely than not’ that interest rates would have to rise further.

Banks have more scope for making fatter profits when interest rates are high.

as a result, Standard Chartered gained 0.8pc, or 5p, to 612.2p and HSBC advanced 1.5pc, or 8p, to 553.5p.