John Spencer: “Business as usual” at MWBEX despite MWB Group in Administration

MWB Business Exchange
MWB Business Exchange

MWB Business Exchange has just released its year-end report, showing increased revenue and continued improvements. But the administrators have been called at MWB Group Holdings, which owns 72.5% of the serviced office company. What does this mean for MWBEX – and could it spell a change in ownership further down the line?

MWB Business Exchange is London’s largest supplier of serviced office space, and the second largest flexible office space operator in the UK. Through its 60+ business centres, the company has raised the profile of flexible workspace and helped to put the industry firmly on the map.

But recently, MWB Business Exchange (MWBEX) has gained coverage for all of the wrong reasons.

MWB Group Holdings, the 75.2% shareholder of MWB Business Exchange, was placed in administration on 16th November 2012. As well as its stake in the serviced office portfolio, MWB Group owns Malmaison Hotels and Hotel du Vin, and it is believed that the administration move reflects an effort to resolve debts within both MWB Group itself and the hotel chains.

“Business as usual”

MWB Business Exchange has distanced itself from the Group. Speaking after the announcement, John Spencer, Chief Executive of Business Exchange, said:

“We remain a completely independent and separate business from MWB Group. I would like to reassure all customers, suppliers and employees of Business Exchange that the appointment of an Administrator to MWB Group is not expected to have any future impact on the financial position of Business Exchange or on its operational performance, or on its management and staff.

“It remains very much business as usual at Business Exchange.”

The company’s public relations group yesterday (26/11/12) stated that they “couldn’t comment” on the future of MWBEX, and referred all enquiries to the administrator of MWB Group, Deloitte. In the meantime, references were drawn to the annual results of MWBEX, which shows that the company is trading well and prospects look positive. For the year ended June 2012, revenues were up 10% at £121.1m, and revenue per occupied workstation increased by 4%.

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“Easiest option”

However, various reports such as claims made by the Financial Times reveal that the “easiest option” would be for MWB Group to sell its 75.2% share in MWBEX. Part of the administrator’s role is to determine the value of the company’s assets, and as a profitable business that has shown improvement and growth, could this leave MWBEX open to offers?

In its report, MWBEX said: “Our business model of offering unbranded centres in prestigious locations, coupled with excellent customer service, continues to be an attractive, unique and sustainable proposition with opportunity for further growth.”

This is an attractive proposition and indeed, last year Regus took steps towards buying the company with an offer of £60million. At the time, the offer was rejected – but with the administrators on board and the current situation fluctuating from one day to the next, new developments are expected at pace.

For now, it’s business as usual at MWBEX. But flexible workspace is a highly competitive and fast-paced industry, and with the continued growth of mobile working and coworking trends, the industry is firmly under the spotlight. And this will only serve to open the door to prospective investors, whether or not their offers are welcome.

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