IHG’s half year results to 30 June 2012 show continuing positive trading, maintained confidence going forward, underlying margin growth, increasing dividend.
Driving market share: highlights
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| – | Americas first half RevPAR up 7.1% (US 7.2%); Europe 1.9%; AMEA 7.9%; Greater China 9.7%. |
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| – | 17,449 rooms (112 hotels) added to the system with 8,924 rooms (50 hotels) removed. |
| – | Pipeline of 167,485 rooms (1,060 hotels, 13% leading active global share). Over 40% under construction. |
| – | Signings of 22,104 rooms (152 hotels), ahead of H1 2011 including 14,073 Holiday Inn brand family rooms. |
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| – | Holiday Inn continues to outperform, growing RevPAR premiums to the upper midscale segment in the US over the past 5 years by 6% pts for Holiday Inn and 5% pts for Holiday Inn Express. |
| – | Crowne Plaza repositioning underway as planned, with expected completion by end of 2015. |
| – | Hotel Indigo has demonstrated strong growth in H1, with 8 hotel openings and 10 signings. |
| – | HUALUXE Hotels and Resorts first 4 pipeline signings in H1, with a further 4 in July, plus 19 letters of intent. |
Chief Executive’s comments
Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, said:
“We have delivered good results in the first half with RevPAR growth from all regions through gains in both occupancy and rate. Our brands continue to perform well and we have achieved solid underlying margin growth, resulting in increased profits and strong cash flows.
“We are increasing the interim dividend by 31% reflecting these results, our previously stated intention to rebalance the interim and final dividend payments and our confidence in the future prospects of the business.
“Consistent with our asset light strategy and our strong track record of returning funds to shareholders, we today announce a $1bn return of capital.
“We continue to invest for growth, strengthening both our existing and our new brands, including EVEN Hotels and HUALUXE Hotels & Resorts. While the global economic environment remains uncertain, IHG continues to trade well and we are confident that our strategy will deliver high quality growth into the future.”
| Financial summary | 2012 | 2011 | % Change YoY | ||
| Actual | CER | ||||
| Revenue | $878m | $850m | 3% | 5% | |
| Operating profit | $286m | $269m | 6% | 7% | |
| Total adjusted EPS | 64.1¢ | 59.2¢ | 8% | ||
| Total basic EPS3 | 94.8¢ | 54.0¢ | 76% | ||
| Interim dividend per share | 21.0¢ | 16.0¢ | 31%4 | ||
| Net debt | $564m | $818m | |||
Current trading update for Europe
Solid performance in challenging markets sees:
- RevPAR increased 1.9%, with 1.0% rate growth. RevPAR was up 1.5% in the second quarter reflecting the continued uncertainty in macro economic conditions across Europe with rate up 0.9%. (Q2 RevPAR: UK 1.9%, Germany 7.1%, France 0.9%).
- Revenue increased 11% (19% at CER) to $206m and operating profit increased 2% (8% at CER) to $52m, with an adverse impact on growth from the weakening Euro:Dollar exchange rate over the period. At CER and after adjusting for a leased hotel disposal and excluding results from managed lease hotels, revenue increased 1% and operating profit increased 10%, driven in part by a decrease in regional overheads offset by higher costs in the owned and leased hotels.
- Signed 2,964 rooms (17 hotels), including an InterContinental in St. Petersburg and 4 Hotel Indigo hotels. 3,225 rooms (22 hotels) were opened into the system, the most in a half year since 2008, including 4 Hotel Indigo hotels.
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