Brokers label Regus a ‘buy’ on upbeat outlook

20th August 2013

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Brokers are showing solidarity in their support for Regus and The Share Centre has even labelled it, its ‘share of the week’ writes Philip Scott.

Regus, which has seen its stock rise by 79 per cent in the past 12 months, and by 40 per cent in just six, provides businesses with fully equipped offices and conference rooms that fit their specific requirements. It was established in 1989, and now operates in around 100 countries worldwide.

Brokers believe that despite the relative weaknesses in the global economic environment, the demand for Regus’ services is rapidly increasing as a result of the structural shift in the modern corporate world for flexible and mobile work solutions.

Helal Miah, investment research analyst at The Share Centre says: “The group remains focused on expanding the global and national networks looking for presence in new countries and cities. Investors should be aware that in the short term this is likely to impact costs.”

The broker consensus on share data website Digital Look also has the stock rated a ‘buy’.

Miah adds: “The profitability of the business is highly geared as there are high fixed costs and the revenue stream is very sensitive to occupancy levels and global economic growth prospects. However, the revenue stream is very international and not heavily dependent on the relatively weaker economies of Europe and the UK.

“We recommend Regus as a ‘buy’ for investors seeking a longer term investment in a high risk growth stock. The share price has reached multi-year highs so we would advise investors to buy on dips in these levels.”

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