Office rental firm Regus has reported wider losses, and warned that it may need a cash injection if trading conditions get any tougher.

The company on Wednesday said losses for the three months to the end of June widened to �10.7m ($14.9m), compared with �7.6m during the same period last year.

Regus, which rents serviced office space to businesses, said it had enough cash to keep going provided market conditions continued as they were.

But it added: "To the extent that trading conditions deteriorate, we may need to seek external finance."

The company said it was planning to sell off peripheral businesses and some franchises in an attempt to cut costs.

Capacity cut

Regus, which capitalised on a surge in business start-ups during the boom years of the late 1990s, has been hit hard by the economic downturn.

An oversupply of office space has driven rental values down in some of its markets, forcing it to trim capacity.

But the firm said on Wednesday that while the market remained difficult, it had brought more than 1,000 workstations back into service in response to customer demand, and had chalked up its greatest ever number of forward orders.

"We believe we are well placed to benefit from an upturn in market conditions," said Regus chairman John Matthews.

In the City, Regus shares closed 1p lower at 16.25p on Wednesday.