LONDON (ShareCast) - (Sharecast News) - Workspace said half the rent it was owed at the end of March went unpaid as the coronavirus crisis began to hit the flexible office space company's business.
Despite the fall in rental income the FTSE 250 company said it was holding off on deciding whether to pay its final dividend.

Workspace said trading profit for the year to the end of March was expected to be in line with market expectations but that government restrictions had caused a material slowdown in business since late March.

The company, which rents out office space in London, said all its sites were open but that it had received many requests for rent relief during the Covid-19 lockdown. Only about 50% of quarterly and monthly rent due from more than 3,000 customers was paid at the end of March.

Unlike many businesses publishing Covid-19 updates, Workspace did not announce the postponement of dividends. The company said it would weigh up whether to pay a final dividend before announcing annual results in June.

"In line with usual practice, the board will consider any final dividend payment in the context of the full-year results and the prevailing circumstances at the time," Workspace said.

Workspace said it expected it expected a significant drop in rental income but that its balance sheet was strong and that ownership of its buildings' freeholds gave it flexibility during the crisis. The company has cut spending and postponed the opening of centres in the Hackney and Bow districts.

Workspace said it had £70m in cash, undrawn credit facilities of £96m and no material debt to be repaid until June 2022. The company said it could withstand a fall in net rental income of 61% or a 63% drop in asset valuation before breaching any debt covenants.

Graham Clemett, Workspace's chief executive, said: "We are making every effort to support our employees, suppliers and customers in these difficult times. In particular, we recognise that our continued success depends on the ability of customers to emerge from the coronavirus pandemic in good financial shape, and we are working with them to achieve this."

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