JustCo narrows losses after 2 key market exits

Last year’s bankruptcy of co-working space operator WeWork might have damaged investor perceptions of the whole industry.

However, the sector itself turns out to be performing decently.

After a small dip in 2021, the total number of co-working spaces worldwide has steadily increased. Currently, 43% of these spaces are estimated to be profitable.

JustCo appears to have reached this milestone, at least from an operating income perspective. The Singapore-based firm made US$1.3 million in income from operating activities in 2023 – which marked an improvement from negative US$15.9 million in 2022.

Photo credit: JustCo

This was driven by a 14.9% increase in revenue to US$113.8 million, combined with a 3.5x rise in other income, as well as expenses that only rose by 2.7%,

JustCo declined to comment on its results.

Other income in 2023, however, was flattered by a US$6.3 million gain on the remeasuring of a previously held equity interest in a joint venture. If this amount were removed, then the results from operating activities in 2023 would still be negative.

A US$177 million boost

Since its founding in 2011, JustCo has expanded to 40 locations across Australia, Japan, Singapore, South Korea, Taiwan, and Thailand.

Its regional ambitions took off in 2018, when it partnered with Singapore’s sovereign wealth fund GIC and Singapore-based developer Frasers Property to invest US$177 million in shared workspaces throughout Asia Pacific.

To complement its co-working solutions, JustCo also provides private offices, enterprise offices, and hot desks for its customers.

Most of its revenue comes from membership fees, which contributed US$99 million or 87% of total revenue in 2023. The firm also registered US$11.6 million in service income, which comes from its ancillary services such as additional access to meeting rooms and virtual offices.

The company was able to turn an operating profit due to strong management of expenses – which grew slower than revenue during the year. JustCo also incurred lower net finance costs for the year.

As a result, the company’s loss before income tax in 2023 narrowed by 63% to US$12.1 million.

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