Workspace Group plc R.E.I.T. (WKP) AI Stock Analysis

• Market Cap: £729.61M
• Dividend Yield: 7.48%
• Average Volume (3M): 536.55K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.11
• Revenue Growth: -1.67%
• EPS Growth: -120.18%
• Country: UK
• Employees: 329
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): 0.16
• Shares Outstanding: 192,312,520
• 10 Day Avg. Volume: 418,750
• 30 Day Avg. Volume: 536,547
• PEG Ratio: -1.44
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 4.30
• P/FCF Ratio: 51.41
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £441.90
• Price Target Upside: 12.73% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 23.42
• Revenue Forecast (FY): £10.14B

• Rating: 57 Neutral
• Price Target: 395.00p ▲(0.77% Upside)

Workspace Group plc's overall stock score reflects a stable financial performance with strong cash flow generation but low profitability. The technical analysis indicates a bearish trend, while the valuation is mixed with a high dividend yield but negative earnings. The earnings call and corporate events provide some positive signals, but challenges remain in occupancy and valuation.

Positive Factors

Cash Generation

Strong cash generation capabilities indicate efficient cash management, providing the company with the flexibility to invest in growth opportunities and weather economic downturns.

Customer Satisfaction

An increase in customer satisfaction suggests enhanced service quality and customer loyalty, which can lead to higher retention rates and stable revenue streams.

Strategic Asset Disposal

Strategic disposal of non-core assets helps streamline operations and focus on core business areas, potentially improving operational efficiency and financial health.

Negative Factors

Occupancy Decline

A decline in occupancy rates can lead to reduced rental income and impact financial performance, necessitating efforts to attract new tenants and stabilize revenue.

Valuation Decrease

A decrease in property valuation reflects potential challenges in asset management and market perception, which could affect borrowing capacity and investment appeal.

Profitability Concerns

Losses before tax highlight ongoing operational challenges and restructuring costs, which may strain financial resources and require strategic adjustments to improve profitability.

Workspace Group plc R.E.I.T. Business Overview & Revenue Model

Company Description

Workspace Group plc R.E.I.T. (WKP) is a UK-based real estate investment trust specializing in the acquisition, development, and management of commercial properties, particularly in urban locations. The company focuses primarily on flexible workspace solutions, catering to a diverse range of clients from start-ups to established corporations, and providing them with adaptable office environments that meet the evolving needs of modern businesses.

How the Company Makes Money

Workspace Group generates revenue primarily through leasing office spaces to tenants, which includes both traditional long-term leases and flexible short-term agreements. The company benefits from a diversified tenant base, which helps mitigate financial risk. Additionally, WKP earns income from property management services and ancillary services such as meeting room rentals and event spaces. Strategic partnerships with co-working operators and service providers enhance its offerings, driving higher occupancy rates and customer retention. The company's focus on urban locations and the growing demand for flexible workspace solutions further contribute to its revenue streams.

Workspace Group plc R.E.I.T. Financial Statement Overview

Summary

Workspace Group plc demonstrates resilient revenue growth and operational recovery, with improving cash flow metrics indicative of financial stability. However, profitability remains a concern with low net income margins and return on equity. The company maintains a strong equity position, but the balance sheet reflects moderate leverage which requires careful management to mitigate risk. Overall, the financial health is stable but with areas needing improvement.

Income Statement

The company shows stable revenue with a slight growth of 0.49% over the past year, indicating resilience. Gross profit margin is strong at 65.9%, but net profit margin is low at 2.92% due to high operating costs and interest expenses. EBIT margin improved significantly from a negative position last year, now at 20.19%, showcasing operational recovery. However, EBITDA margin slightly decreased to 20.78%, signaling some operational challenges.

Balance Sheet

The debt-to-equity ratio is at 0.58, indicating moderate leverage. Return on equity is low at 0.36%, reflecting limited profitability relative to shareholder investment. The equity ratio is healthy at 60.81%, showing a strong equity position, but the decrease in total assets and equity over recent years could signal potential risks.

Cash Flow

Operating cash flow increased to 76.6 million, improving the operating cash flow to net income ratio significantly. Free cash flow grew by 198.08% over the previous year, indicating strong cash generation capabilities. The free cash flow to net income ratio is robust, reflecting efficient cash management, though the high capital expenditures could impact future cash flows.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	182.90M	185.20M	184.30M	174.20M	132.90M	142.30M
Gross Profit	0.00	122.10M	126.20M	116.60M	86.70M	81.50M
EBITDA	100.40M	38.50M	-157.10M	97.40M	70.10M	-209.90M
Net Income	-75.90M	5.40M	-192.50M	-37.80M	123.90M	-235.70M
Balance Sheet
Total Assets	2.35B	2.47B	2.53B	2.84B	2.51B	2.59B
Cash, Cash Equivalents and Short-Term Investments	1.30M	25.30M	11.60M	18.50M	49.00M	191.00M
Total Debt	864.30M	876.00M	889.50M	943.60M	626.50M	779.10M
Total Liabilities	955.40M	968.30M	982.50M	1.05B	712.30M	874.10M
Stockholders Equity	1.40B	1.50B	1.55B	1.79B	1.80B	1.72B
Cash Flow
Free Cash Flow	67.20M	15.50M	51.90M	74.90M	56.70M	36.00M
Operating Cash Flow	68.50M	76.60M	53.90M	78.80M	57.90M	38.40M
Investing Cash Flow	10.90M	16.50M	45.90M	-200.20M	9.20M	-14.90M
Financing Cash Flow	-79.90M	-72.00M	-106.70M	90.90M	-209.10M	90.30M

Workspace Group plc R.E.I.T. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 392.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:WKP, the sentiment is Neutral. The current price of 392 is above the 20-day moving average (MA) of 379.32, below the 50-day MA of 395.34, and below the 200-day MA of 400.44, indicating a neutral trend. The MACD of -5.33 indicates Negative momentum. The RSI at 44.21 is Neutral, neither overbought nor oversold. The STOCH value of 37.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:WKP.

Workspace Group plc R.E.I.T. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLN	72 Outperform	£1.97B	8.29	6.80%	4.06%	2.30%	―
SHC	68 Neutral	£2.78B	8.46	8.66%	2.73%	-0.04%	655.16%
BYG	68 Neutral	$1.97B	15.08	4.95%	4.61%	1.81%	-51.09%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
GPE	64 Neutral	£1.37B	11.24	7.31%	2.59%	12.73%	―
IWG	63 Neutral	£2.15B	141.45	―	0.37%	-2.24%	―
WKP	57 Neutral	£729.61M	―	-5.20%	7.48%	-1.67%	-120.18%

Workspace Group plc R.E.I.T. Corporate Events

Workspace Group Director Acquires Shares, Signaling Confidence

Workspace Group PLC announced that David Stevenson, a Non-Executive Director, has purchased 1,320 ordinary shares at a price of £3.77 each. This transaction, conducted on the London Stock Exchange, reflects a strategic move by a key managerial figure, potentially indicating confidence in the company’s future performance and market position.

Workspace Group Announces New Directorship for Rosie Shapland

Workspace Group PLC announced that Rosie Shapland, its Senior Independent Non-Executive Director, will join SThree plc as an independent non-executive director and a member of their Audit and Risk, Nominations, and Remuneration Committees. She is expected to become the Chair of the Audit and Risk Committee starting January 2026. This appointment highlights the recognition of Shapland’s expertise and may strengthen the ties between Workspace and SThree, potentially impacting strategic collaborations or governance practices.

Workspace Group Advances Portfolio Strategy with £41.7m Asset Disposal

Workspace Group PLC has completed the disposal of three assets for £41.7 million, aligning with its conviction-led portfolio strategy. This move is part of the company’s broader ‘Fix, Accelerate, Scale’ strategy, aiming for £200 million in disposals over two years to optimize asset value and enhance shareholder returns.

Workspace Group Director Increases Stake with Share Purchase

Workspace Group PLC announced that Manju Malhotra, a Non-Executive Director, purchased 2,724 ordinary shares at £3.66987 each on the London Stock Exchange. This transaction highlights the confidence of the company’s management in its market position and future prospects, potentially influencing stakeholder perceptions positively.

Workspace Group PLC Director Purchases Shares, Signaling Confidence

Workspace Group PLC announced that David Stevenson, a Non-Executive Director, has purchased 1,366 ordinary shares at a price of £3.64 each on the London Stock Exchange. This transaction reflects a potential vote of confidence in the company’s future prospects by a key managerial figure, which may positively influence stakeholder perceptions and market positioning.

Workspace Group PLC Reports Steady Progress Amid Challenging Market

Workspace Group PLC reported its half-year results, highlighting progress in its ‘Fix, Accelerate and Scale’ strategy despite a challenging market environment. The company is focusing on stabilizing and rebuilding occupancy, with strategic partnerships like the one with Qube to lease space for content creators. Workspace has completed or exchanged £52.4 million in disposals as part of its portfolio optimization efforts and aims to reach £200 million in disposals within two years. Despite a decrease in net rental income and a loss before tax due to property valuation changes, the company maintains a robust balance sheet and is committed to delivering attractive returns for investors.

Workspace Group Partners with Qube for New Creative Hub in Shoreditch

Workspace Group PLC has announced a 20-year lease agreement with Qube, a specialist flex operator, to create a new content creator hub at The Old Dairy in Shoreditch. This partnership allows Workspace to expand its market by tapping into the growing demand from SME industries, particularly in the creative sector. Workspace is also acquiring a minority equity stake in Qube for £3 million, which will be reinvested into the hub’s fit-out. This strategic move aligns with Workspace’s goal to become the leading space provider for creators and innovators in London, and it highlights the company’s ability to adapt to market trends by collaborating with niche operators.

Workspace Group Appoints New Head of Revenue

Workspace Group PLC has appointed James Graham as the new Head of Revenue, effective January 5. With extensive experience in sales and operations, particularly in the flexible workspace sector, Graham is expected to enhance customer retention and drive revenue growth, supporting Workspace’s strategy to rebuild occupancy and income growth.

Workspace Group Advances Strategy Amid Occupancy Challenges

Workspace Group PLC reported progress in its strategy to stabilize and rebuild occupancy, despite a decline due to large customer vacancies at The Centro Buildings in Camden. The company completed 326 lettings in the quarter and achieved £2 million in annualized efficiencies by streamlining operations. Workspace is advancing its asset disposal strategy, having exchanged or completed £52.4 million in low-conviction asset sales. The company is also expanding its specialized offerings to certain industries, aiming to drive future growth and shareholder value.

Workspace Group PLC Advances Strategy with Asset Disposals

Workspace Group PLC has announced the sale of two properties, Morie Street in Wandsworth and Castle Lane in Victoria, for a total of £22.4 million. This move is part of their ‘Fix, Accelerate and Scale’ strategy, aiming to recycle capital from smaller, non-core locations into high-conviction buildings to maximize shareholder value and better serve their SME customers.

Workspace Group PLC Advances Strategy with Asset Disposals

Workspace Group PLC has announced the sale of two properties, Morie Street in Wandsworth and Castle Lane in Victoria, for a total of £22.4 million. This move is part of their ‘Fix, Accelerate and Scale’ strategy, aimed at reallocating capital from smaller, non-core assets to more strategic locations that better serve their SME customers and maximize shareholder value.

Workspace Group PLC Announces Block Listing Application for New Shares

Workspace Group PLC has applied for the admission of 1,273,756 ordinary shares to the UK Listing Authority’s Official List and the London Stock Exchange. These shares are reserved under a block listing and may be issued through employee share schemes, enhancing the company’s ability to incentivize and retain talent. This move is expected to support Workspace’s operational flexibility and market positioning, potentially benefiting stakeholders by aligning employee interests with company growth.