Analysts are tipping Regus as a stock for intrepid investors to snap up as demand for the group’s services is rapidly increasing as a result of a structural shift in the modern corporate world.
Shares in support services group, which is the world’s largest provider of flexible office space with a global network of over 2000 premises spread across 100 countries, are down by 6% over the past year but they have rebounded by 11% over the past three months.
Currently the market consensus has the stock in ‘buy’ territory and Helal Miah, investment research analyst at The Share Centre, has picked Regus as his share of the week.
He says: “On a constant currency basis, the group’s first half sales and operating profits increased by 17% and 41% respectively, compared to the same period last year. However, like most other businesses with a large portion of operations overseas, the appreciation of sterling made a big dent in sales and profitability.”
Notably a trading update in October reported a 7% rise in third quarter revenue as well as this and the addition of 84 new locations. The group expects to open 450 new centres for the current year and according to Miah, remains confident that these will drive future sales and earnings as the global economy recovers slowly.
Miah adds: “As a result, management believe that the business will continue to perform strongly and develop in line with expectations. Despite the weakness in the global economic environment, we recommend Regus as a ‘buy’ for high risk investors.”
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