Wework unsure over long-term liquidity due to how Covid-19 changed the way we work
Flexible office space giant Wework has raised concerns over its long-term future after the Covid-19 pandemic sparked a dramatic shift to remote-working.
The company said today that it has sufficient liquidity to “mitigate the near-term uncertainty associated with Covid-19”.
However it said the key judgements in relation to approving the company’s accounts as a going concern were the timing of recovery to pre-pandemic levels and the likelihood and impact of further lockdowns.
“The extent to which Covid-19 could continue to impact Wework’s global business and its operations in the UK depends on future developments which are uncertain, cannot be predicted and are outside our control,” the workspace provider said.
“Including new information which may quickly emerge regarding the severity of the virus, the scope of the outbreak and the actions to contain the virus or treat its impact and how quickly we can resume normal operations, among others.”
The company is scrambling to make its properties Covid-proof, by implementing social distancing measures, de-densifying common areas and reconfiguring offices.
The impact of the pandemic is also expected to affect the firm’s 2020 results, it said as it published its accounts for 2019.
Wework said it had suffered lower occupancy levels, a reduction in new sales volumes, slower cash collection rates, lowered credit limits and an increase in discounts to occupiers.
In the year ended 31 December 2019, Wework’s UK business posted an operating loss of £231.6m, compared to a loss of £74m the previous year.
Management fee income in the period increased to £68.3m, up from £35.8m in 2018.