Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, commented on the results:
“2013 marked IHG’s tenth anniversary as a standalone company, and was another year of strong performance. We delivered good underlying growth in revenues and profits, further reduced the capital intensity of the business and continued to generate high returns.
“Over the last 12 months we entered into agreements to dispose of three owned InterContinental hotels, with total gross proceeds of almost $830m. This includes InterContinental Mark Hopkins, San Francisco which we have announced today. At the same time we are continuing to invest behind our award-winning brands and technology platforms to meet changing consumer behaviours and sustain our industry-leading position.
“We opened 237 hotels and signed a further 444 hotels into our pipeline, the highest number for five years, thereby reinforcing our already strong brand distribution platform and with it the promise of further high quality growth.
“Our decision to increase our ordinary dividend by 9% reflects our confidence in our proven strategy to deliver high quality growth. Our preferred portfolio of brands, brought to life by talented people and best in class delivery systems, will enable us to continue to drive out-performance in an industry which has compelling long term prospects. Looking into 2014, although economic conditions in some markets remain uncertain, forward bookings data is encouraging and we are confident that we will deliver another year of growth.”
|
Financial summary |
2013 |
2012 |
Actual |
% Change YoY |
|
|
CER |
Underlying |
||||
| Revenue | $1,903m | $1,835m | 4% | 4% | 4% |
| Fee revenue | $1,176m | $1,135m | 4% | 4% | – |
| Operating profit | $668m | $605m | 10% | 10% | 8% |
| Adjusted basic EPS | 158.3¢ | 139.0¢ | 14% | – | – |
| Basic EPS | 140.9¢ | 187.1¢ | (25)% | – | – |
| Total dividend per share | 70.0¢ | 64.0¢ | 9% | – | – |
| Net debt | $1,153m | $1,074m | – | – | – |
Delivering high quality, sustainable growth
- $21.6bn of total gross revenue from hotels in IHG’s system, up 2% (3% CER)
- Global comparable RevPAR growth of 3.8%, with rate up 1.8% and occupancy up 1.3%pts
- Americas 4.3% (US 4.2%); Europe 1.7%; AMEA 6.1%; Greater China 1.0%.
- Q4 global comparable RevPAR growth of 4.4%: Americas 4.0%; Europe 4.9%; AMEA 6.4%; Greater China 2.4%.
- System size of 687k rooms (4,697 hotels)
- Net growth of 1.6%, 2.3% excluding 17 hotel removals for which significant liquidated damages totalling $46m were received.
- 35k rooms (237 hotels) opened, 25k rooms removed (142 hotels). 20k room openings and 18k room removals for the Holiday Inn brand family reflects our continued commitment to improving the quality of our largest brand.
- 65k rooms (444 hotels) signed, up 22% year on year.
- Pipeline of 180k rooms (1,120 hotels) with over 45% under construction.
- 5% global industry supply, 12% active industry pipeline; well positioned to deliver sustainable high quality growth.
- Building preferred brands
- Clear focus on the needs of target guests has driven increased guest satisfaction across each brand globally.
- Good momentum for new brands with 21 HUALUXE Hotels & Resorts and 5 EVEN Hotels in the pipeline.
- IHG Rewards Club relaunch, including free internet for all members (an industry first), has driven a 10%pt increase in awareness of IHG as a brand family.
- Growing margins
- Group fee margin of 43.2%, up 1.3%pts, with scale benefits and cost efficiencies more than offsetting increased investment for future growth. Continued focus on sustainable fee margin progression over the medium term.
Capital Expenditure
- Growth capital expenditure of $129m includes the first three owned EVEN Hotels, and was more than funded by $444m net cash proceeds from disposals. Maintenance capital expenditure of $140m.
- In 2014 expect to remain at the top end of previously guided $250m-350m capital expenditure range due to increased investment in brands and technology platforms. IHG’s 20% share of InterContinental New York Barclay’s c.$175m refurbishment cost will be in addition to this.
Progress on asset disposals
- InterContinental London Park Lane disposal completed on 1 May with up to 60 year management contract.
- Disposal of 80% interest in InterContinental New York Barclay agreed with a c.$175m refurbishment, repositioning and extension of the hotel and up to 50 year management contract. Deal completion expected in Q1 2014.
- InterContinental Mark Hopkins, San Francisco disposal announced today for gross cash proceeds of $120m.