InterContinental Hotels Group PLC has reported its half year results to 30 June 2013, describing them as delivering good performance with brands driving RevPAR growth of 3.7%, Revenue up 7%, and Operating Profit up 20%. Current trading trends are broadly in line with the first half.
| Financial summary |
2013 |
2012 |
|
|
|
|
Actual |
|
|
|||
| Revenue |
$936m |
$878m |
7% |
||
| Operating profit |
$338m |
$281m |
20% |
||
| Total adjusted EPS |
78.2¢ |
62.8¢ |
25% |
||
| Total basic EPS4 |
127.8¢ |
93.4¢ |
37% |
||
| Interim dividend per share |
23.0¢ |
21.0¢ |
10% |
||
| Net debt |
$861m |
$564m |
|||
Richard Solomons, Chief Executive:
“We have delivered a good performance in the first half, with our preferred brands driving RevPAR growth of 3.7%, including 4.0% in the second quarter.
“Our global scale has allowed us to reinvest in the business whilst growing margins, resulting in solid underlying profit gains led by our Americas region, and strong cash flows.
“Consistent with our long track record of returning value to shareholders, we today announce a $350m special dividend. In addition we are increasing the interim dividend by 10% reflecting our good first half results and the confidence we have in the future prospects of the business.
“We continue to strengthen our foundation for future growth, signing more than 200 hotels into our pipeline, a notable increase on H1 2012 reflecting our owners’ confidence in both IHG and the industry demand drivers.
“Our high quality pipeline, broad geographic spread and fee based model give us confidence in the outlook, despite the ongoing challenging economic conditions in some of our markets.”
Driving Market Share
• Total gross revenue from hotels in IHG’s system of $10.4bn, up 1% (2% CER).
• Global RevPAR growth of 3.7% (rate up 1.9%) with second quarter up 4.0% (rate up 1.8%).
- Americas 4.5% (US 4.7%); Europe 0.4%; AMEA 6.2%; Greater China (0.1)%.
- Q2 RevPAR: Americas 4.6% (US 4.7%); Europe 2.2%; AMEA 6.8%; Greater China (1.9)%.
• Total system size of 678k rooms (4,643 hotels), up 1.7% year on year.
- 15k rooms (108 hotels) added to the system, with over half of these for the Holiday Inn brand family.
- Pipeline of 179k rooms (1,098 hotels), over 40% under construction.
- Signings of 32k rooms (216 hotels) up over 40% on H1 2012, with 9k rooms in Greater China.
- Openings and signings include 4k rooms on US Army bases added in the half.
• Fee revenue up 4% to $562m, led by the Americas with growth of 7%.
- Increasing proportion of new rooms are now coming from developing markets, which have lower
absolute RevPAR levels, particularly in the initial years as demand drivers mature.
• Building preferred brands.
- Three EVEN Hotels in the pipeline at the end of June, of which two were added in H1, and with a fourth in July.
- Four HUALUXE Hotels & Resorts signed, taking the pipeline to 19 hotels.
- IHG Rewards Club launched 1 July; first loyalty programme in the industry to offer members free internet globally.
- Holiday Inn ranked “Highest in Guest Satisfaction Among Mid-scale Full Service Hotel Chains” by
J.D. Power and Associates for 3rd year running.
- Holiday Inn Express Stay Smart™ campaign relaunched in the US.
• Growing margins.
- Fee based margin of 44.0%, up c.50 basis points year on year on an underlying basis.