Office-space provider Workspace Group Plc plunged to its first annual loss in 12 years on Thursday as it was impacted by a slump in rental prices and lost around 10% of customers due to the coronavirus pandemic.
Company insolvencies in England and Wales fell to their lowest in more than 30 years in early 2021 as the government’s support helped businesses to ward off bankruptcy.
With employees and consumers marooned at home by lockdowns, however, companies have been striving to cut costs and few are investing. Workspace said rents had been driven down by weak demand.
“The past year has been one of the most challenging in Workspace’s history; with London effectively closed for much of it,” Chief Executive Officer Graham Clemett said.
Net rental income at the company fell 33% to 81.5 million pounds, with 20 million pounds of rent discounts and deferrals given to customers.
The 10% decrease in the underlying value of its property was more than six times its trading profit of 38.7 million pounds.
Workspace and larger peer IWG, however, have both pointed to the positive impact that a shift to more flexible working arrangements is likely to have on their businesses in future.
“The role of the office in our working lives is being re-examined and all the signs highlight flexibility, quality and wellbeing becoming more important for businesses and their people,” Clemett said, adding the company will complete two more projects in the second half of the year.
The London-based company reported a pre-tax loss of 235.7 million pounds for the full year ended March 31, compared to a profit of 72.5 million pounds a year earlier.