Flexible office firm Regus - with two branches in Gloucester - has seen a slump in demand affect profits this year.

The parent company IWG has warned that profits will be "well below" the previous year because of the ongoing Covid situation.

Overall office occupancy has been lower than expected and underlying earnings are expected to be well below the previous year, the company reports. Shares fell sharply on the news.

Regus has branches at Gloucester docks and at Conway House in Worcester Street in the city centre.

Overall, the company says the outlook is improving with "unprecedented demand for our flexible work products as many more enterprises adopt hybrid working".

Occupancy is said to be improving, enquiries are at pre-pandemic levels and the flow of corporate customers is increasing.

IWG said these trends "support the board's view that the prolonged impact of Covid-19 on the group's 2021 results is one of timing".

It expects profitability and cash generation will improve as lockdown restrictions ease.