By Esha Vaish
(Reuters) - Office space provider Regus Plc (L:RGU) said it would spend about 210 million pounds ($335 million) to open new centres this year, which analysts said was lower than they had expected, sending the company's shares up as much as 7 percent.
The low capital expenditure number eased fears that rapid expansion would shoot up the company's debt and reduce earnings.
Regus's stock was the top percentage gainer on the FTSE-250 mid cap index (FTMC) on the London Stock Exchange.
Regus, which provides meeting rooms, business lounges and office spaces for rent, raised in August the number of centres it planned to open this year to about 450 from at least 300 announced in March.
The company has been looking to expand to meet rising demand, mainly from its technology clients, which include Google Inc (O:GOOGL) and GlaxoSmithKline Plc (L:GSK).
RBC Capital Markets analyst David Greenall said that Regus's capital expenditure estimate was lower than his forecast of 232 million pounds.
Regus, which has over 2,000 centre locations, said on Friday it also expected to spend roughly 60 million pounds to open about 200 locations in 2015.
Four analysts on average had estimated capital expenditure of 239.6 million pounds for 2014 and of 247.9 million pounds for 2015, according to Thomson Reuters I/B/E/S.
Peel Hunt analyst Andrew Shepherd-Barron told Reuters that the lower-than-expected capital expenditure meant that "by the end of 2015, net debt could be 100 million pounds less than previously envisaged."
Regus had net debt of 144 million pounds as of Sept. 30.
New centres take 16-18 months to break even and about two years to be fully established, according to Regus.
The company said turnover rose 7 percent to 413.6 million pounds in the third quarter ended Sept. 30. At constant currency, turnover increased by 13.5 percent.
However, revenue at established centres - those opened on or before Dec. 31, 2012 - slipped 4.4 percent, but rose 1.9 percent excluding the impact of currency fluctuations.
The Luxembourg-based company's stock was up 7 percent at 197.68 pence at 1025 GMT. Up to Thursday's close, the stock had fallen about 12 percent this year.
($1 = 0.63 British pound)
(Editing by Gopakumar Warrier and Kirti Pandey)