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WeWork rival IWG expects annual profit at lower end of market estimates

FILE PHOTO: The 30 St Mary Axe skyscraper which is known locally as "The Gherkin" is seen in London

(Reuters) -Office rental firm IWG Plc said it expects annual profit to be towards the lower end of market estimates on Tuesday, as inflationary pressures cloud the group's recovery from COVID-19 lows but demand for hybrid working by businesses remains robust.

The group said it remains "cautiously optimistic" about the full year, as it forecast adjusted core profit to come in the lower end of the range of market expectations of 304 million pounds to 380 million pounds ($350.69 million to $438.37 million).

IWG had reported losses for the previous two years, as the group's operations were hit by the pandemic.

The group is merging its digital assets with flexible workspace platform The Instant Group, as tenants reassess their options, including a shift to a permanent hybrid model in which employees split work between home and office.

The group's revenue in the nine months to Sept. 30 rose 24% to 2.05 billion pounds, supported by prices above inflation levels and stronger occupancy.

IWG, which has centres in more than 3,300 locations across 120 countries, said its monthly profitability is growing as the group focuses on costs to mitigate pressures from heightened inflation.

($1 = 0.8669 pounds)

(Reporting by Muhammed Husain in Bengaluru; Editing by Rashmi Aich)