Helping companies in APAC and the Middle East adapt to the post-COVID-19 world of work Strong demand drives further expansion across APAC and GCC Steady performance with revenues up 5.3 % y/y to US 119.6m EBITDA down y/y 3.2% to us 21.7m Steady cashflow generation from stable client base NEW DELHI, Sept. 2, 2020 /PRNewswire/ — The Executive Centre (TEC), the leading premium flexible workspace provider with more than 135 centres in 32 cities and 14 countries across the world's fastest growing economies of Asia Pacific and the Middle East, releases financial results for the six months ended June 30, 2020 (“1H2020”).
“It cannot be denied that the COVID-19 pandemic has been the main external factor impacting the performance of companies. As a result, the world of work is changing dramatically as businesses focus on managing costs to survive and look for workspaces with greater flexibility to support in office and remote working. We have been supporting our members during the pandemic and have invested significantly in health and safety measures to ensure minimal disruption to our clients. We have seen stronger demand coming from MNCs and domestic corporates since April across the Greater Bay Area and South-East Asia which helped to drive sustainable revenue growth and profitability in the first half of the year,” said TEC Founder and CEO, Paul Salnikow.
“Looking ahead to the rest of 2020, recurring waves of COVID-driven economic lockdowns will undoubtedly remain a challenge to businesses. However, we are optimistic towards the future of the office. Although the global health crisis is fundamentally reshaping corporate working environments, we expect offices to remain an important hub for creativity and idea sharing. We also believe that more companies will have core and satellite offices, with some employees working closer to home or continuing to work from home and are investing in new city centre locations, such as Meguro in Tokyo. The current environment has driven an acceleration of flexible workspace trends and we believe this will advance the growth and development of TEC's business in line with client demand,” he added.
KEY BUSINESS HIGHLIGHTS FOR 1H 2020 INDIA Reported 27 per cent increase in revenue for India business at USD 20.5 million (around Rs 150 crore) during January-June this year despite COVID-19 pandemic The Executive Centre's India revenue stood at USD 16.1 million (around Rs 119 crore) in the corresponding period of the previous year SOUTH ASIA Revenue in 1H20 grew by 18% YoY to US 21.3 million EBITDA increased by 31.6% YoY to US 7.6 million Occupancy increased to 89.1% from 87.4% YoY GLOBAL Sustainable revenue growth and profitability in the face of COVID-19 pandemic conditions Revenue in 1H20 grew by 5.3% YoY to US 119.6 million Serviced Office revenue increased 7.4% YoY to US 90.5 million Business Services revenue decreased 0.8% YoY to US 29.1 million EBITDA decreased by 3.2% YoY to US 21.7 million 1H20 EBITDA margin was 18.1%, as compared to 19.7% in 1H19 Performance is underpinned by strong client demand Total number of workstations occupied as of 30 June 2020 increased by 13.8% YoY Client renewal rate increased to 62% in 1H20 from 60.2% Notable new signings from financial services & banking, IT and consulting sectors Demand-led expansion continues to deliver growth Opened 6 additional centres (111.5k sq.ft.) in 1H20 Strong pre-sales delivered first month average new centre occupancy of 61% Total workstation capacity increased 14.8% YoY Occupancy of all centres opened within the past 12 months, increased to 81.8% as of 30 June 2020 Robust balance sheet with stable client base Cash on hand increased to US 53.7 million with available credit facilities of US 20.7 million Net debt leverage ratio of 1.9x MNC's with high credit rating comprise 77% of client base About The Executive Centre India The Executive Centre (TEC) opened its doors in Hong Kong in 1994 and today boasts over 135+ centres in 32 cities and 14 countries. It is the third largest serviced office business in Asia with annual turnover in excess of US 275 million.
The Executive Centre set foot on the Indian soil in the city of Mumbai in 2008. Ever since, it has become the leading and preferred premium serviced office brand in the India market and is now operating 30 centres spread over 8 lakh sq ft at prestigious Grade A addresses in Mumbai, Gurgaon, New Delhi, Hyderabad, Bangalore, Chennai and Pune.
The Executive Centre caters to ambitious professionals and industry leaders looking for more than just an office space – they are looking for a place for their organisation to thrive. TEC has cultivated an environment designed for success with a national network spanning New Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Pune, and Gurgaon, with sights to go further and grow faster. Each Executive Centre offers a prestigious address with the advanced infrastructure to pre-empt, meet, and exceed the needs of its Members. Walking with Members through every milestone and achievement, The Executive Centre empowers ambitious professionals and organisations to succeed.
Privately owned and headquartered in Hong Kong, TEC is Asia Pacific's leading premium serviced office provider. TEC provides first class Private and Shared Workspaces, Business Concierge Services, and Meeting & Conference facilities to suit any business' needs.