Shares in Regus Group (LON:RGU) , the serviced offices group, were hit hard this morning after the company warned that it was far from clear how its full year would play out given the ongoing economic uncertainty. It warned that the UK remained its most difficult region with the early signs of improvement seen in the first quarter losing some momentum in a fragile market. The company’s shares fell by 15% to 95.9p.

However, the group noted that it was seeing some improvement in its leading indicators, particularly within the Americas and Asia Pacific, and was benefiting from cost reduction programmes of previous years. It also said that the conditions remained supportive of a continuing improvement in the business over the remainder of the year but warned that trading conditions remained tough and that this was likely to impact its pace of recovery.

At Regus’s Annual General Meeting later today, chairman John Matthews, is set to tell investors that the company has continued to make progress in a challenging trading environment and is trading broadly in line with expectations. Revenues for the four months to April 30, 2010, (at actual exchange rates) were £340.7m, with the total number of workstations growing to 176,078. In line with its strategy Regus has continued to grow its geographic presence with new centres opened including Tianjin in China, Accra in Ghana, St Helier in Jersey along with openings in existing cities such as Berlin, Chicago and Mexico City.

Elsewhere, the group enjoyed robust underlying cash generation, ending the period with £235.4m of cash despite investing £14.1m to grow and develop its centres and paying £1.0m to purchase shares to settle share option exercises.

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