IWG plc (IWG.L), mcap=$1766m

IWG.L pitch:
– Global operator of flexible working spaces with 4x the locations of their next-largest competitor.
– Currently in the early stages of transferring the majority of the current business into the franchised business.
– If successful, would result in the transfer of a significant part of lease liabilities and the cost base onto a third party.
– This would leave IWG with a far higher margin royalty stream likely to be valued by the market on a more generous multiple.
– The currently large operating lease liability (even if non-recourse and tied to individual properties) is a significant concern among investors.

IWG.L valuation:
– Set to generate 29p EPS by 2025, 55p by 2030.
– SOTP approach, mature estate + franchised business + The Instant Group, results in 430p fair value today.

Exp. gain: +140% to 430p

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