August 11, 2009
- London
InterContinental
Hotels Group PLC
Half
Year Results to 30 June 2009
Financial
results
|
2009
|
2008
|
% change
|
% change CER
|
|
|
|
Total
|
Excluding
LDs1
|
Total
|
Excluding
LDs1
|
Revenue
2
|
$726m
|
$974m
|
(25)%
|
(24)%
|
(21)%
|
(20)%
|
Adjusted
operating profit 2
|
$179m
|
$291m
|
(38)%
|
(35)%
|
(41)%
|
(38)%
|
Total
adjusted EPS 2
|
41.5¢
|
58.1¢
|
(29)%
|
|
|
|
Total
basic EPS 3
|
(10.2)¢
|
56.0¢
|
(118)%
|
|
|
|
Interim
DPS
|
12.2¢
|
12.2¢
|
-
|
|
|
|
Net
debt
|
$1,328m
|
$1,623m
|
|
|
|
|
All figures are
before exceptional items unless otherwise noted. See
appendices 3 and 4 for analysis of
financial headlines. Constant exchange
rate comparatives shown in appendix 5.
(% CER) = change in constant
currency.
1 –
excluding $3m of significant liquidated damages (LDs)
receipts in the first half 2009 and $22m in the first half 2008.
2
– hotels previously accounted for as
discontinued
operations have been re-presented as continuing operations and the
relevant
comparatives restated.
3 –
total basic EPS after exceptional items.
Business
headlines
|
·
|
Global
constant currency first half RevPAR decline of 16.2%, with a second
quarter decline of 18.6%. IHG’s brands outperformed the industry in
each of its three regions.
|
·
|
9,849
net rooms (117 hotels) added in the first half, taking system size to
629,700 rooms (4,303 hotels), up 5% year on year.
|
·
|
26,956
rooms (229 hotels) added to the system, 17,107 rooms (112 hotels)
removed in line with our quality growth strategy.
|
·
|
22,754
rooms (159 hotels) signed, taking the pipeline to 226,248 rooms (1,599
hotels).
|
·
|
On
track to exceed 2009 targeted cost reductions with first half reported
regional and central costs $51m below 2008 levels.
|
·
|
Net
debt of $1.3bn held broadly flat on the position at 31 December 2008.
|
·
|
Interim
dividend maintained at 12.2¢,
equivalent to 7.3p at the closing exchange rate on 7 August 2009.
|
·
|
Exceptional
operating charges of $201m include $162m of non-cash asset impairment
charges.
|
Recent
trading
|
·
|
July
global constant currency RevPAR decline of 14.4%; -14.2% Americas,
-15.1% EMEA and -14.5% Asia Pacific.
|
·
|
Forward
bookings data, which provides limited visibility, shows no further
deterioration in demand. July benefited from stronger leisure demand
|
Update
on priorities
|
·
|
Reduce
costs. 2009 regional
and central costs are now expected to be around $80m below 2008 levels
comprising at least $40m of sustainable savings, $20m of currency
benefit and $20m of non-sustainable savings. The
drive to improve efficiency continues and by the end of 2010 compared
to 2008 levels, IHG expects to achieve sustainable cost savings of
between $65m and $70m, representing a c.20% reduction, net of increases
such as inflation and investment in growth. The
additional estimated cost to achieve these savings will be c.$25m with
a c.$22m cash cost.
|
·
|
Open
rooms.
c.90,000 rooms under construction, c.25,000 of which are scheduled to
open in the balance of the year (26,956 rooms opened in the half). Room removals are still expected to be in the
region of 35,000 for both 2009 and 2010.
|
·
|
Drive
share.
US RevPAR
outperformed the market by 2.7 percentage points (IHG US brands H1
RevPAR decline of 16.0% compared to US industry decline of 18.7%).
|
·
|
Relaunch
Holiday Inn. 1,040 hotels
now operating under the new standards. Results from the first
relaunched hotels continue to show RevPAR outperformance of more than
5% compared to a control group.
|
Commenting
on the results, Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC said:
|
“Trading was
very challenging throughout the first half of the year and we expect
the remainder of 2009 to be tough.
“We have made
good progress on improving efficiency and reducing costs as we make
more effective use of our scale. We will
continue to invest behind our system to drive revenue and grow market
share.
“The continued
out performance of our brands around the world is encouraging, as is
our signings pace which, despite the continued scarcity of financing
for developers, is still averaging around one deal a day.
We are on track to open more than 400 hotels this
year. We are making good progress with the
global relaunch of Holiday Inn and over 1000 hotels have now completed
this process. Feedback from relaunched
hotels continues to be positive and we are still committed to
completing the programme by the end of 2010.
“The outlook
remains challenging, but we are confident that with our fee based
business model, substantially reduced cost base, strong financial
position and the renewal and refreshment of our brands supported by our
system scale, we will outperform the competition and be well positioned
for the upturn.”
|
Americas
|
Revenue
performance
RevPAR declined
15.8% in the first half, with a second quarter decline of 18.0%. In the US, IHG’s brands outperformed the
industry by 2.7 percentage points in the first half, driven by the
resilience of the midscale brands which represent 80% of IHG’s rooms in
this market. Revenues declined 25% to
$375m. Excluding one $13m liquidated
damages receipt in the first half of 2008, revenues declined 23%.
Operating
profit performance
Operating profit
declined 40% from $249m to $149m. Excluding
the $13m liquidated damages receipt, operating profit declined 37%. A 28.6% decline in RevPAR from owned and leased
hotels, partially offset by strong cost control at hotel level, drove
the drop in these hotels’ operating profit from $26m to $4m. In the managed business, excluding the $13m
liquidated damages receipt in the first half of 2008, a RevPAR decline
of 18.4% caused a $34m drop in operating profit to a loss of $9m. This was primarily due to IHG funding
shortfalls to the agreed owner’s priority return on a number of hotels
managed for one owner. This operating
profit decline is in line with the disclosed sensitivity that a 1%
change in RevPAR has a $7m impact on annual operating profit across the
global managed business, of which some $4m relates to the Americas. Franchised hotels’ operating profit fell by 18%
to $177m driven by a 12% decline in royalty fees and an $11m reduction
in fees associated with initial franchising, relicensing and
termination, partially offset by a 5% increase in room count.
|
EMEA
|
Revenue
performance
RevPAR declined
16.4% in the first half, with a second quarter decline of 20.3%
reflecting the impact of the movement of Easter from March to April. The Middle East and the UK were the most
resilient markets with first half RevPAR declines of 8.5% and 10.7%
respectively. Revenues declined 31% (20% at constant exchange rates
(CER)) to $186m. Excluding one liquidated
damages receipt of $3m in the first half of 2009 and one of $9m in the
first half of 2008, revenues declined 30% (18% CER).
Operating
profit performance
Operating
profit declined 35% (30% CER) from $89m to $58m or 31% (26% CER)
excluding the net $6m impact of the two liquidated damages receipts. Owned and leased operating profit almost halved
to $10m, primarily due to tough trading conditions at InterContinental
Paris Le Grand. Managed hotels’ operating
profit declined by $23m to $33m, or by $14m excluding the impact of one
liquidated damages receipt in the first half of 2008. Continued
growth in fees in the Middle East was offset by the impact of a 25.4%
RevPAR decline across the European managed estate and the annualisation
of the reduced contribution from a portfolio of hotels in the UK, first
reported in the third quarter of 2008. Excluding
the $3m liquidated damages receipt in the first half of 2009,
franchised hotels’ operating profit declined $8m to $27m (9% at CER)
driven by a RevPAR decline of 17.0% being partially offset by a 7%
increase in room count.
|
Asia
Pacific
|
Revenue
performance
RevPAR
declined 17.9% in the first half, with a
second quarter decline of 19.3%. Greater
China was the weakest market with a first half RevPAR decline of 21.7%,
significantly better than the industry down 33.3% which continues to be
impacted by the recent increases in supply, particularly by
international brands. Revenues declined 25% (22% CER) to $106m.
Operating
profit performance
Operating
profit declined 41% (34% CER) from $29m to $17m. Operating
profit at owned and leased hotels fell by $9m to $11m primarily
reflecting a RevPAR decline of 28.1% at the InterContinental Hong Kong.
Managed hotels’ operating
profit declined 35% (23% CER) to $17m driven by a 16.5% RevPAR decline.
|
Strong
operating system
|
Revenue
delivery to hotel owners through reservation channels and loyalty
programmes continued to improve:
|
·
|
$4.4bn of rooms
revenue or 66% of total rooms revenue, was booked through IHG's
channels or by Priority Club Rewards members direct to hotel, up 4
percentage points on the first half of 2008.
|
·
|
Priority Club
Rewards members of 44m, up from 42m at the end of 2008.
|
·
|
Internet
revenues increased from 19% to 23% of total rooms revenue, 79% from
IHG’s own websites.
|
Interest,
tax and exceptional items
|
The
interest charge for the period fell $27m to $28m due to a reduction in
interest rates and lower average net debt.
Based
on the position at the end of the half, the tax charge has been
calculated using an estimated annual tax rate of 22% (2008: 28%). The reported tax rate may continue to vary
year-on-year but is expected to increase in the medium to long term.
The
$162m exceptional impairment charge comprises (i) $57m write down of
goodwill and a $32m intangible asset write off, both relating to the
Americas managed operation; and (ii) $73m impairment to hotels
including $14m in catch-up depreciation resulting from their
re-presentation from held for sale to continuing operations.
|
Cash
flow & net debt
|
$91m
of cash was generated from operating activities in the six months to 30
June and $12m of cash was generated from disposals.
Growth capital expenditure in the half was $9m and
maintenance capital expenditure was $31m. Full
year maintenance capital expenditure is still expected to be c.$75m.
IHG’s
net debt was maintained at $1.3bn at the end of the first half,
including the $203m finance lease on the InterContinental Boston. IHG remains well placed in terms of its banking
facilities, with a $1.6bn revolving credit facility expiring May 2013
and a $0.5bn term loan expiring November 2010.
|
1: Asset disposal
programme detail
|
Number of owned
hotels
|
Proceeds
|
Net book value
|
Disposed since
April 2003
|
183
|
$5.5bn
|
$5.2bn
|
Remaining hotels
|
16
|
-
|
$1.6bn
|
For
a full
list please visit www.ihg.com/Investors
Appendix
2: Rooms
|
Americas
|
EMEA
|
Asia Pacific
|
Total
|
Openings
|
21,072
|
2,674
|
3,210
|
26,956
|
Removals
|
(12,414)
|
(2,036)
|
(2,657)
|
(17,107)
|
Net openings
|
8,658
|
638
|
553
|
9,849
|
Signings
|
15,004
|
3,781
|
3,969
|
22,754
|
Appendix 3: First
half financial headlines
Six months to 30 June $m
|
Total
|
Americas
|
EMEA
|
Asia
Pacific
|
Central
|
|
2009
|
2008*
|
2009
|
2008*
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
Owned and leased operating profit
|
25
|
65
|
4
|
26
|
10
|
19
|
11
|
20
|
-
|
-
|
Managed operating profit
|
41
|
120
|
(9)
|
38
|
33
|
56
|
17
|
26
|
-
|
-
|
Franchised operating profit
|
209
|
253
|
177
|
215
|
30
|
35
|
2
|
3
|
-
|
-
|
Regional overheads
|
(51)
|
(71)
|
(23)
|
(30)
|
(15)
|
(21)
|
(13)
|
(20)
|
-
|
-
|
Operating profit pre central
overheads
|
224
|
367
|
149
|
249
|
58
|
89
|
17
|
29
|
-
|
-
|
Central overheads
|
(45)
|
(76)
|
-
|
-
|
-
|
-
|
-
|
-
|
(45)
|
(76)
|
Operating profit
|
179
|
291
|
149
|
249
|
58
|
89
|
17
|
29
|
(45)
|
(76)
|
|
|
|
|
|
|
|
|
|
|
|
|
* 2008
comparatives restated for those owned
hotels previously accounted for as
discontinued operations, now re-presented as continuing operations.
Appendix 4: Second
quarter financial headlines
Three months to 30 June $m
|
Total
|
Americas
|
EMEA
|
Asia
Pacific
|
Central
|
|
2009
|
2008*
|
2009
|
2008*
|
2009
|
2008
|
2009
|
2008
|
2009
|
2008
|
Owned and leased operating profit
|
18
|
40
|
5
|
16
|
9
|
14
|
4
|
10
|
-
|
-
|
Managed operating profit
|
21
|
62
|
(5)
|
15
|
17
|
35
|
9
|
12
|
-
|
-
|
Franchised operating profit
|
112
|
139
|
97
|
118
|
14
|
20
|
1
|
1
|
-
|
-
|
Regional overheads
|
(24)
|
(36)
|
(11)
|
(15)
|
(6)
|
(10)
|
(7)
|
(11)
|
-
|
-
|
Operating profit pre central
overheads
|
127
|
205
|
86
|
134
|
34
|
59
|
7
|
12
|
-
|
-
|
Central overheads
|
(20)
|
(41)
|
-
|
-
|
-
|
-
|
-
|
-
|
(20)
|
(41)
|
Operating profit
|
107
|
164
|
86
|
134
|
34
|
59
|
7
|
12
|
(20)
|
(41)
|
|
|
|
|
|
|
|
|
|
|
|
|
* 2008
comparatives restated for those owned
hotels previously accounted for as
discontinued operations, now re-presented as continuing operations.
Appendix 5: Constant
currency operating profit movement before exceptional items.
|
Americas
|
EMEA
|
Asia Pacific
|
Total***
|
|
Actual currency*
|
Constant
currency**
|
Actual currency*
|
Constant
currency**
|
Actual currency*
|
Constant
Currency**
|
Actual currency*
|
Constant
currency**
|
Growth/
(decline)
|
(40.2)%
|
(40.2)%
|
(34.8)%
|
(30.3)%
|
(41.4)%
|
(34.5)%
|
(38.5)%
|
(41.2)%
|
Exchange rates
|
GBP:USD
|
EUR: USD
|
2009
|
0.67:1
|
0.75:1
|
2008
|
0.51:1
|
0.65:1
|
*
US dollar
actual currency; ** Translated at constant 2008 exchange rates; ***
After Central
Overheads
Appendix 6:
Investor
information for 2009 interim dividend
Ex-dividend
Date: 26 August 2009
|
Record
Date: 28 August 2009
|
Payment
Date: 2 October 2009
|
Dividend
payment: Ordinary shares 7.3p per share:
ADRs 12.2¢
per ADR
|
For
further information,
please contact:
Investor
Relations (Alex Shorland-Ball; Catherine Dolton):
|
+44
(0) 1895 512 176
|
Media Affairs
(Leslie McGibbon; Emma Corcoran):
|
+44 (0) 1895 512
425
|
|
+44 (0) 7808 094
471
|
High resolution
images to accompany this announcement
are available for the media to download free of charge from
www.vismedia.co.uk
. This includes profile shots of the key executives.
Presentation
for Analysts and Shareholders
A presentation with Andrew
Cosslett (Chief
Executive) and Richard Solomons (Chief Financial Officer and Head of
Commercial
Development) will commence at 9.30am (London time) on 11 August at
Merrill
Lynch Financial Centre, 2 King Edward Street, London, EC1A 1HQ. There will be an opportunity to ask
questions. The presentation will
conclude at approximately 10.30am (London
time).
There will be a
live audio webcast of the results presentation on the web address www.ihg.com/interims09. The archived webcast of the presentation is
expected to be on this website later on the day of the results and will
remain
on it for the foreseeable future. There
will also be a live dial-in facility
International dial-in
|
+44 (0)203 037 9090
|
US Q&A
conference call
There will also be a conference
call, primarily for
US investors and analysts, at 10.00am (Eastern Standard Time) on 11
August with
Andrew Cosslett (Chief Executive) and Richard Solomons (Chief
Financial Officer and Head of
Commercial Development). There will be
an opportunity to ask questions.
International
dial-in
|
+44 (0)20 7108 6370
|
US Toll Free
|
866 692 5726
|
Conference ID:
|
HOTEL
|
A recording of the conference
call will also be
available for 7 days. To access this
please dial the relevant number below and use the access number 5717.
International dial-in
|
+44 (0)207 108 6347
|
US Toll Free
|
866 851 6712
|
Website
The
full release and supplementary data will be available on our website
from 7.00
am (London time) on 11 August. The web address is www.ihg.com/interims09.
To watch a video
of Andrew Cosslett reviewing our
results visit our YouTube channel at www.youtube.com/ihgplc
Notes to
Editors:
InterContinental
Hotels Group (IHG) [LON:IHG, NYSE:IHG (ADRs)] is the world's largest
hotel
group by number of rooms. IHG owns,
manages, leases or franchises, through various subsidiaries, over 4,300
hotels
and almost 630,000 guest rooms in nearly 100 countries and territories
around
the world. The Group owns a portfolio of
well recognised and respected hotel brands including InterContinental®
Hotels & Resorts, Hotel Indigo®, Crowne Plaza®
Hotels
& Resorts, Holiday Inn® Hotels and Resorts, Holiday
Inn Express®,
Staybridge Suites® and Candlewood Suites®,
and also
manages the
world's largest hotel loyalty programme, Priority Club® Rewards with 44 million
members
worldwide.
IHG
has nearly 1,600 hotels in its development
pipeline, which will create 140,000 jobs worldwide over the next few
years.
InterContinental
Hotels Group
PLC is the Group's holding company and is incorporated in Great Britain and registered in England and Wales.
IHG offers
information and online reservations for all
its hotel brands at www.ihg.com and
information
for the Priority Club Rewards programme at www.priorityclub.com. For the
latest
news from IHG, visit our online Press Office at www.ihg.com/media.
Cautionary note
regarding
forward-looking statements
This
announcement contains certain forward-looking statements as defined
under US
law
(Section 21E of the Securities Exchange Act of 1934).
These forward-looking statements can be
identified by the fact that they do not relate to historical or current
facts. Forward-looking statements often
use words such as ‘anticipate’, ‘target’, ‘expect’, ‘estimate’,
‘intend’,
‘plan’, ‘goal’, ‘believe’ or other words of similar meaning. By their nature, forward-looking statements
are inherently predictive, speculative and involve risk and uncertainty. There are a number of factors that could
cause actual results and developments to differ materially from those
expressed
in or implied by, such forward-looking statements.
Factors that could affect the business and
the financial results are described in ‘Risk Factors’ in the
InterContinental
Hotels Group PLC Annual report on Form 20-F filed with the United
States
Securities and Exchange Commission.
Interim Management
Review
This
Interim
Management Review discusses the performance of InterContinental Hotels
Group
(the Group or IHG) for the six months ended 30 June 2009.
GROUP PERFORMANCE
|
3 months ended
|
6 months ended
|
|
30 June
2009
|
30
June
2008
|
%
|
30 June
2009
|
30
June
2008
|
%
|
Group Results
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Americas
|
196
|
258
|
(24.0)
|
375
|
499
|
(24.8)
|
|
EMEA
|
99
|
156
|
(36.5)
|
186
|
271
|
(31.4)
|
|
Asia Pacific
|
50
|
69
|
(27.5)
|
106
|
141
|
(24.8)
|
|
Central
|
30
|
32
|
(6.3)
|
59
|
63
|
(6.3)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
375
|
515
|
(27.2)
|
726
|
974
|
(25.5)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Operating profit before exceptional items:
|
|
|
|
|
|
|
|
Americas
|
86
|
134
|
(35.8)
|
149
|
249
|
(40.2)
|
|
EMEA
|
34
|
59
|
(42.4)
|
58
|
89
|
(34.8)
|
|
Asia Pacific
|
7
|
12
|
(41.7)
|
17
|
29
|
(41.4)
|
|
Central
|
(20)
|
(41)
|
51.2
|
(45)
|
(76)
|
40.8
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
107
|
164
|
(34.8)
|
179
|
291
|
(38.5)
|
|
|
|
|
|
|
|
Exceptional operating items
|
(175)
|
6
|
-
|
(201)
|
(4)
|
-
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
(68)
|
170
|
(140.0)
|
(22)
|
287
|
(107.7)
|
Net financial expenses
|
(14)
|
(25)
|
44.0
|
(28)
|
(55)
|
49.1
|
|
____
|
____
|
____
|
____
|
____
|
____
|
(Loss)/profit before tax
|
(82)
|
145
|
(156.6)
|
(50)
|
232
|
(121.6)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
|
|
|
|
|
Earnings per ordinary share:
|
|
|
|
|
|
|
|
Basic
|
(19.6)¢
|
34.8¢
|
(156.3)
|
(10.2)¢
|
56.0¢
|
(118.2)
|
|
Adjusted
|
26.0¢
|
34.5¢
|
(24.6)
|
41.5¢
|
58.1¢
|
(28.6)
|
Revenue
decreased
by 25.5% to $726m and operating profit before exceptional items
decreased by 38.5%
to $179m during the six months ended 30 June 2009.
At constant exchange rates, revenue and
operating profit before exceptional items decreased 21.5% and 41.2%
respectively. Included in these results
is $3m of liquidated damages received by IHG in the first half of 2009
in
respect of the settlement of a franchise contract in the EMEA region.
In the
first half of 2008 $22m of liquidated damages were received relating to
the
settlement of two management contracts; $13m relating to the Americas
region and $9m relating to
the EMEA region. Excluding these receipts, revenue and operating profit
before
exceptional items decreased by 24.1% and 34.6% respectively and at
constant
exchange rates by 20.0% and 37.5% respectively.
In
response to the
effects of the global economic downturn the Group has taken a number of
actions
to improve efficiency and reduce costs. This action has resulted in a
$51m reduction
in regional and central overheads from $147m to $96m during the first
half of
2009, including a saving of $10m relating to variable remuneration and
a $20m
currency benefit.
As
a result of the
declining real estate market the InterContinental Atlanta and
Staybridge Suites
Denver Cherry Creek no longer meet the criteria for designation as held
for
sale assets and consequently the results of these hotels are no longer
categorised as discontinued operations and comparative figures have
been
restated accordingly. Depreciation not charged on these assets from
initial
designation as held for sale assets to 30 June 2009 has been charged as
an
exceptional item in the period.
Profit
before tax
decreased by 121.6% to a loss of $50m and adjusted earnings per
ordinary share
decreased by 28.6% to 41.5¢.
The
IHG global
system (the number of hotels and rooms which are owned, leased, managed
or
franchised) increased in the first half of 2009 by 117 hotels (9,849
rooms)
with openings of 229 hotels (26,956 rooms) and removals of 112 hotels
(17,107
rooms) continuing IHG’s strategy to reinvigorate brands through the
removal of
lower quality, non-brand conforming hotels. This strategy is further
supported
by the ongoing relaunch of the Holiday Inn brand family, which
incorporates the
consistent delivery of best in class service and physical quality in
all
Holiday Inn and Holiday Inn Express hotels. At the period end, 922
hotels were
open under the updated signage and brand standards.
At
30 June 2009,
the IHG pipeline which represents hotels and rooms where a contract has
been
signed and the appropriate fees paid, totalled 1,599 hotels (226,248
rooms) a
decline of 176 hotels (18,837 rooms) since the year end, primarily due
to a
decrease in signings of 197 hotels (25,528 rooms) compared to the same
period
last year.
THE AMERICAS
|
3 months ended
|
6 months ended
|
|
30 June
2009
|
30
June
2008
|
%
|
30 June
2009
|
30
June
2008
|
%
|
Americas Results
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Owned and leased
|
57
|
80
|
(28.8)
|
106
|
154
|
(31.2)
|
|
Managed
|
24
|
44
|
(45.5)
|
55
|
97
|
(43.3)
|
|
Franchised
|
115
|
134
|
(14.2)
|
214
|
248
|
(13.7)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
196
|
258
|
(24.0)
|
375
|
499
|
(24.8)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Operating profit before exceptional items:
|
|
|
|
|
|
|
Owned and leased
|
5
|
16
|
(68.8)
|
4
|
26
|
(84.6)
|
|
Managed
|
(5)
|
15
|
(133.3)
|
(9)
|
38
|
(123.7)
|
|
Franchised
|
97
|
118
|
(17.8)
|
177
|
215
|
(17.7)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
97
|
149
|
(34.9)
|
172
|
279
|
(38.4)
|
Regional overheads
|
(11)
|
(15)
|
26.7
|
(23)
|
(30)
|
23.3
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
86
|
134
|
(35.8)
|
149
|
249
|
(40.2)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Revenue
and
operating profit before exceptional items decreased by 24.8% to $375m
and 40.2%
to $149m respectively during the six months ended 30 June 2009. IHG’s hotel brands experienced tough trading
conditions in the first half of the year leading to a decline in RevPAR
of
15.8%, however, overall they continued to outperform the market. Excluding the receipt of liquidated
damages of $13m in the first half of 2008 revenue and
operating profit declined by 22.8% and 36.9% respectively.
Owned
and leased
revenue decreased by 31.2% to $106m and operating profit decreased by
84.6% to
$4m. RevPAR across the owned and leased estate declined 28.6% year on
year.
Trading at the InterContinental New York was severely impacted by the
collapse
of the financial markets, and whilst revenues were down at the
InterContinental
Boston, cost saving measures implemented at the hotel reduced the
negative
impact on operating profit. Results were further impacted by the sale
of the
Holiday Inn Jamaica, which was sold in August 2008, leading to a $12m
loss in
revenue and $1m loss in operating profit when compared to the first
half of
2008. As a result of the declining real estate market the
InterContinental
Atlanta and Staybridge Suites Denver Cherry Creek no longer meet the
criteria
for designation as held for sale assets and consequently the results of
these
hotels are no longer categorised as discontinued operations and
comparative
figures have been restated accordingly. Depreciation not charged on
these
assets from initial designation as held for sale assets to 30 June 2009
has
been charged as an exceptional item in the period.
Managed
revenue
decreased by 43.3% to $55m with all managed portfolios being impacted
by the
global financial downturn. In the first half of the year, RevPAR across
the managed
estate declined by 18.4%. The year on year revenue variance is further
impacted
by the receipt of $13m in liquidated damages in the first half of 2008.
Excluding this, revenues declined by 34.5% to $55m. Managed operating
profit
decreased by $47m to $(9)m due to the RevPAR driven decline in revenues
and IHG
funding owner’s priority return shortfalls on a number of hotels
managed by one
owner. Excluding the $13m of
liquidated damages operating
profit was down by $34m.
The
managed
results include $36m (2008 $47m) of revenue and $3m (2008 $5m) of
operating
profit from four properties that are structured, for legal reasons, as
operating leases but with the same characteristics as management
contracts.
During
the first
half of 2009, franchised revenue and operating profit decreased by
13.7% to
$214m and 17.7% to $177m respectively, compared to the same period in
2008. This decrease was predominantly
driven by a fall in royalty revenues as a consequence of a RevPAR
decline of
15.1%. Both rate and occupancy declined compared to the first half of
2008. Revenues
were also impacted by a decline in real estate activity leading to
lower fees
associated with signings of new hotels and conversions. An increase in
overall
room supply partially offset the decline in revenues.
Regional
overheads
decreased by $7m, from $30m to $23m, as a result of improvements in
efficiencies across the region and organisational restructuring to
better align
the corporate structure with the changing requirements of our owners
and
hotels, leading to ongoing cost savings across all overhead functions.
|
Hotels
|
Rooms
|
|
|
Change
over
|
|
Change
over
|
Americas hotel and room
count
|
2009
30 June
|
2008
31
December
|
2009
30 June
|
2008
31
December
|
Analysed by brand:
|
|
|
|
|
|
InterContinental
|
55
|
-
|
18,496
|
(6)
|
|
Crowne Plaza
|
197
|
10
|
54,611
|
3,487
|
|
Holiday Inn
|
891
|
(29)
|
161,196
|
(7,581)
|
|
Holiday Inn Express
|
1,803
|
81
|
153,916
|
7,892
|
|
Staybridge Suites
|
164
|
14
|
17,899
|
1,527
|
|
Candlewood Suites
|
229
|
25
|
22,916
|
2,275
|
|
Hotel Indigo
|
27
|
6
|
3,222
|
584
|
|
Holiday Inn Club Vacations
|
6
|
5
|
2,892
|
480
|
|
____
|
____
|
______
|
_____
|
Total
|
3,372
|
112
|
435,148
|
8,658
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type:
|
|
|
|
|
|
Owned and leased
|
10
|
-
|
3,503
|
(2)
|
|
Managed
|
200
|
1
|
41,102
|
187
|
|
Franchised
|
3,162
|
111
|
390,543
|
8,473
|
|
____
|
____
|
______
|
_____
|
Total
|
3,372
|
112
|
435,148
|
8,658
|
|
____
|
____
|
______
|
_____
|
|
Hotels
|
Rooms
|
|
|
Change
over
|
|
Change
over
|
Americas pipeline
|
2009
30 June
|
2008
31
December
|
2009
30 June
|
2008
31
December
|
Analysed by brand:
|
|
|
|
|
|
InterContinental
|
7
|
-
|
2,293
|
-
|
|
Crowne Plaza
|
38
|
(5)
|
7,962
|
(1,685)
|
|
Holiday Inn
|
246
|
(17)
|
31,703
|
(1,149)
|
|
Holiday Inn Express
|
556
|
(83)
|
49,861
|
(6,604)
|
|
Staybridge Suites
|
140
|
(14)
|
15,040
|
(1,638)
|
|
Candlewood Suites
|
209
|
(33)
|
18,668
|
(3,122)
|
|
Hotel Indigo
|
54
|
(1)
|
6,950
|
(82)
|
|
____
|
____
|
______
|
_____
|
Total
|
1,250
|
(153)
|
132,477
|
(14,280)
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type:
|
|
|
|
|
|
Owned and leased
|
1
|
-
|
210
|
25
|
|
Managed
|
18
|
(2)
|
3,910
|
(298)
|
|
Franchised
|
1,231
|
(151)
|
128,357
|
(14,007)
|
|
____
|
____
|
______
|
_____
|
Total
|
1,250
|
(153)
|
132,477
|
(14,280)
|
|
____
|
____
|
______
|
_____
|
The
Americas
system increased in the first half of 2009 by 112 hotels (8,658 rooms),
with
204 hotels (21,072 rooms) joining the system and 92 hotels (12,414
rooms)
leaving the system, as part of the Group’s continued strategy to
reinvigorate
brands through the removal of lower quality, non-brand conforming
hotels.
The
Americas
pipeline at 30 June 2009 totalled 1,250 hotels (132,477 rooms)
representing a rooms
decline of 9.7% over the pipeline at 31 December 2008 primarily due to
a decrease
in signings in the first half of 2009 at 130 hotels (15,004 rooms),
compared to
294 hotels (32,669 rooms) in the first half of 2008.
Europe, Middle
East and Africa (EMEA)
|
3 months ended
|
6 months ended
|
|
30 June
2009
|
30
June
2008
|
%
|
30 June
2009
|
30
June
2008
|
%
|
EMEA Results
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Owned and leased
|
49
|
68
|
(27.9)
|
87
|
121
|
(28.1)
|
|
Managed
|
31
|
57
|
(45.6)
|
59
|
97
|
(39.2)
|
|
Franchised
|
19
|
31
|
(38.7)
|
40
|
53
|
(24.5)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
99
|
156
|
(36.5)
|
186
|
271
|
(31.4)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Operating profit before exceptional items:
|
|
|
|
|
|
|
Owned and leased
|
9
|
14
|
(35.7)
|
10
|
19
|
(47.4)
|
|
Managed
|
17
|
35
|
(51.4)
|
33
|
56
|
(41.1)
|
|
Franchised
|
14
|
20
|
(30.0)
|
30
|
35
|
(14.3)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
40
|
69
|
(42.0)
|
73
|
110
|
(33.6)
|
Regional overheads
|
(6)
|
(10)
|
40.0
|
(15)
|
(21)
|
28.6
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
34
|
59
|
(42.4)
|
58
|
89
|
(34.8)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
|
|
|
|
|
Revenue
and
operating profit before exceptional items decreased by 31.4% to $186m
and 34.8%
to $58m respectively during the first half of 2009.
At constant currency exchange rates revenue
and operating profit before exceptional items decreased by 19.9% and
30.3%
respectively. The region received liquidated damages of $9m in the
first half
of 2008 and $3m in the first half of 2009. Excluding these receipts
revenue
declined 30.2% and operating profit before exceptional items declined
31.3%,
and at constant currency exchange rates by 18.3% and 26.3% respectively.
In
the owned and
leased estate RevPAR declined by 16.8%, resulting in a revenue and
operating
profit decrease of 28.1% to $87m and by 47.4% to $10m respectively.
Trading at
the InterContinental Le Grand was adversely impacted by a decline in
both
business and international leisure travel and declined despite a boost
from the
biennial air show.
Managed
revenue
decreased by 39.2% to $59m and managed operating profit decreased by
41.1% to
$33m. The managed revenue and operating
profit variances are negatively impacted by the receipt of $9m
liquidated
damages in the first half of 2008. Excluding this, managed revenue and
operating profit decreased by 33.0% and 29.8% respectively, driven by
the
annualisation of the reduced contribution from a portfolio of hotels in
the UK
and
tough trading conditions throughout the European managed estate.
Franchised
revenue
and operating profit decreased by 24.5% to $40m and 14.3% to $30m
respectively.
The franchised performance was heavily impacted by an unfavourable
sterling to
dollar foreign exchange movement, and at constant currency exchange
rates
revenue declined by 11.3% whilst operating profit was in line with the
same
period last year. Excluding $3m of liquidated damages received relating
to the
settlement of one franchise contract during the first half of 2009,
revenue and
operating profit decreased by 30.2% and 22.9% respectively, and by
17.0% and
8.6% at constant currency exchange rates. Overall,
RevPAR declined by 17.0% across the region however this was partially
offset by
an increase in hotel openings.
Regional
overheads
decreased by $6m to $15m compared to the first half of 2008 driven by a
favourable movement in foreign exchange of $5m.
|
Hotels
|
Rooms
|
|
|
Change
over
|
|
Change
over
|
EMEA hotel and
room count
|
2009
30 June
|
2008
31
December
|
2009
30 June
|
2008
31
December
|
Analysed by brand:
|
|
|
|
|
|
InterContinental
|
63
|
(1)
|
20,311
|
(525)
|
|
Crowne Plaza
|
92
|
3
|
21,593
|
864
|
|
Holiday Inn
|
328
|
(4)
|
52,427
|
(612)
|
|
Holiday Inn Express
|
191
|
5
|
22,347
|
783
|
|
Staybridge Suites
|
3
|
1
|
400
|
128
|
|
Hotel Indigo
|
1
|
-
|
64
|
-
|
|
Other brands
|
1
|
-
|
203
|
-
|
|
____
|
____
|
______
|
_____
|
Total
|
679
|
4
|
117,345
|
638
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type:
|
|
|
|
|
|
Owned and leased
|
4
|
-
|
1,446
|
-
|
|
Managed
|
165
|
(14)
|
39,384
|
(1,801)
|
|
Franchised
|
510
|
18
|
76,515
|
2,439
|
|
____
|
____
|
______
|
_____
|
Total
|
679
|
4
|
117,345
|
638
|
|
____
|
____
|
______
|
_____
|
|
Hotels
|
Rooms
|
|
|
Change
over
|
|
Change
over
|
EMEA pipeline
|
2009
30 June
|
2008
31
December
|
2009
30 June
|
2008
31
December
|
Analysed by brand:
|
|
|
|
|
|
InterContinental
|
24
|
(4)
|
6,546
|
(516)
|
|
Crowne Plaza
|
25
|
-
|
7,379
|
92
|
|
Holiday Inn
|
43
|
(7)
|
9,858
|
(346)
|
|
Holiday Inn Express
|
47
|
(10)
|
6,579
|
(1,211)
|
|
Staybridge Suites
|
7
|
(5)
|
859
|
(572)
|
|
Hotel Indigo
|
3
|
3
|
141
|
141
|
|
Other brands
|
1
|
-
|
90
|
-
|
|
____
|
____
|
______
|
_____
|
Total
|
150
|
(23)
|
31,452
|
(2,412)
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type:
|
|
|
|
|
|
Managed
|
65
|
(18)
|
17,999
|
(1,597)
|
|
Franchised
|
85
|
(5)
|
13,453
|
(815)
|
|
____
|
____
|
______
|
_____
|
Total
|
150
|
(23)
|
31,452
|
(2,412)
|
|
____
|
____
|
______
|
_____
|
During
the first
half of 2009, EMEA added a net 4 hotels (638 rooms) to its portfolio,
including
openings of 16 hotels (2,674 rooms), offset by removals of 12 hotels
(2,036
rooms).
The
region’s
pipeline decreased by 13.3% to 150 hotels (31,452 rooms) at 30 June
2009.
Signings during the period decreased by 16 hotels (2,910 rooms) to 16
hotels
(3,781 rooms) compared to the first half of 2008.
Asia Pacific
|
3 months ended
|
6 months ended
|
|
30 June
2009
|
30
June
2008
|
%
|
30 June
2009
|
30
June
2008
|
%
|
Asia Pacific Results
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Owned and leased
|
25
|
37
|
(32.4)
|
57
|
77
|
(26.0)
|
|
Managed
|
22
|
28
|
(21.4)
|
43
|
56
|
(23.2)
|
|
Franchised
|
3
|
4
|
(25.0)
|
6
|
8
|
(25.0)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
50
|
69
|
(27.5)
|
106
|
141
|
(24.8)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Operating profit before exceptional items:
|
|
|
|
|
|
|
Owned and leased
|
4
|
10
|
(60.0)
|
11
|
20
|
(45.0)
|
|
Managed
|
9
|
12
|
(25.0)
|
17
|
26
|
(34.6)
|
|
Franchised
|
1
|
1
|
-
|
2
|
3
|
(33.3)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
14
|
23
|
(39.1)
|
30
|
49
|
(38.8)
|
Regional overheads
|
(7)
|
(11)
|
36.4
|
(13)
|
(20)
|
35.0
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
7
|
12
|
(41.7)
|
17
|
29
|
(41.4)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
|
|
|
|
|
Revenue
decreased
by 24.8% to $106m whilst total operating profit before exceptional
items
decreased by 41.4% to $17m. At constant currency exchange rates revenue
and
operating profit before exceptional items decreased by 22.0% and 34.5%
respectively.
RevPAR declined by 17.9% compared to the first half of 2008.
In
the owned and
leased estate, revenue and operating profit decreased by 26.0% to $57m
and by 45.0%
to $11m respectively, reflecting a RevPAR decline of 28.1% at the
InterContinental Hong Kong.
Managed
revenue
decreased by 23.2% to $43m and managed operating profit decreased by
34.6% to
$17m. Results in the region were impacted by a continued oversupply of
rooms in
key Chinese cities, including Beijing
and Shanghai, and a reduced
contribution from the ANA joint
venture in Japan.
Franchised
revenue
decreased by 25.0% to $6m and operating profit fell by 33.3% to $2m,
driven by
a decline in franchise royalties as a result of the removal of 5 hotels
(1,655
rooms) in the region in an effort to protect the quality of our brands.
Regional
overheads
decreased by $7m to $13m. This includes $3m of reduced marketing costs
associated with the ANA
Crowne Plaza
marketing campaign.
|
Hotels
|
Rooms
|
|
|
Change
over
|
|
Change
over
|
Asia Pacific hotel
and room count
|
2009
30 June
|
2008
31
December
|
2009
30 June
|
2008
31
December
|
Analysed by brand:
|
|
|
|
|
|
InterContinental
|
40
|
-
|
15,289
|
(109)
|
|
Crowne Plaza
|
68
|
2
|
22,487
|
958
|
|
Holiday Inn
|
100
|
(1)
|
27,783
|
(92)
|
|
Holiday Inn Express
|
24
|
-
|
6,193
|
(13)
|
|
Other brands
|
20
|
-
|
5,455
|
(191)
|
|
____
|
____
|
______
|
_____
|
Total
|
252
|
1
|
77,207
|
553
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type:
|
|
|
|
|
|
Owned and leased
|
2
|
-
|
693
|
-
|
|
Managed
|
213
|
6
|
68,348
|
2,208
|
|
Franchised
|
37
|
(5)
|
8,166
|
(1,655)
|
|
____
|
____
|
______
|
_____
|
Total
|
252
|
1
|
77,207
|
553
|
|
____
|
____
|
______
|
_____
|
|
Hotels
|
Rooms
|
|
|
Change
over
|
|
Change
over
|
Asia Pacific pipeline
|
2009
30 June
|
2008
31
December
|
2009
30 June
|
2008
31
December
|
Analysed by brand:
|
|
|
|
|
|
InterContinental
|
36
|
-
|
12,221
|
(308)
|
|
Crowne Plaza
|
58
|
(7)
|
21,476
|
(3,059)
|
|
Holiday Inn
|
75
|
1
|
21,199
|
(6)
|
|
Holiday Inn Express
|
28
|
5
|
7,093
|
1,078
|
|
Hotel Indigo
|
2
|
1
|
330
|
150
|
|
____
|
____
|
______
|
_____
|
Total
|
199
|
-
|
62,319
|
(2,145)
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type:
|
|
|
|
|
|
Managed
|
197
|
-
|
61,993
|
(2,144)
|
|
Franchised
|
2
|
-
|
326
|
(1)
|
|
____
|
____
|
______
|
_____
|
Total
|
199
|
-
|
62,319
|
(2,145)
|
|
____
|
____
|
______
|
_____
|
Asia Pacific hotel and room count increased by
1 hotel (553 rooms) in the first half of 2009 to 252 hotels (77,207
rooms),
including openings of 9 hotels (3,210 rooms), offset by the removal of
8 hotels
(2,657 rooms).
The
pipeline in
Asia Pacific remained at 199 hotels but decreased by 2,145 rooms to
62,319
rooms. Signings were down by 17 hotels (4,953 rooms) to 13 hotels
(3,969 rooms)
compared to the first half of 2008.
Central
Net
central costs
decreased by $31m to $45m during the six months ended 30 June 2009
driven by
savings relating to variable remuneration and a $14m currency benefit.
The cost
savings are a result of a number of actions taken to improve efficiency
and
drive benefits of scale, including the addition of a global procurement
function.
System Funds
In
the six months
ended 30 June 2009, system fund revenues decreased by 3.5% to $473m
primarily
as a result of lower assessment fees driven by lower RevPARs across the
system. However, the assessment revenue
shortfall was partially offset by other revenues related to system wide
promotional programmes targeting consumers and reservation channel
promotions.
Exceptional Operating Items
Exceptional
operating items, a charge of $201m in the six months ended 30 June
2009, consisted
of:
|
$14m in relation to the ongoing Holiday Inn
relaunch;
|
|
$21m enhanced pension transfers to deferred
members of the InterContinental Hotels UK Pension Plan who accepted an
offer to receive the enhancement as either a cash lump sum or an
additional transfer value to an alternative pension plan provider;
|
|
$162m of non-cash impairment charges
reflecting the poorer trading environment in 2009 and included $45m
relating to hotels reclassified from held for sale assets; and
|
|
$4m severance costs.
|
Taxation
The
tax charge on
profit before tax, excluding the impact of exceptional items, has been
calculated using an estimated rate of 22%.
By also excluding the effect of prior year items, the
equivalent
effective tax rate would be approximately 39%. This rate is higher than
the UK statutory
rate of 28% due mainly to certain
overseas profits (particularly in the US)
being subject to statutory rates higher than the UK statutory rate,
unrelieved
foreign taxes and disallowable expenses.
Taxation
within
exceptional items totalled a credit of $52m. This represents,
primarily,
deferred and current tax relief on exceptional costs together with the
release
of exceptional prior year provisions.
Net
tax paid in
the six months ended 30 June 2009 totalled $43m.
Treasury
The
Group has
continued its focus on cash management during the six months ended 30
June
2009. Cash generated from operating activities was $91m, a decrease of
$197m
over the same period in 2008.
Net
debt at 30
June 2009 of $1,328m comprised cash and cash equivalents of $109m and
loans and
other borrowings of $1,437m. Net
financial expenses decreased from $55m to $28m for the six months ended
30 June
2009 due to significantly lower interest rates in the first half of
2009.
Dividends
The
Board has
proposed an interim dividend per share of 12.2¢ (7.3p).
Risks and
Uncertainties
The principal risks and uncertainties which
could affect the Group for the remainder of the financial year remain
those set
out on pages 26 to 28 of the IHG Annual Report and Financial Statements
2008.
In summary, the Group is exposed to risks
relating to:
|
the reputation of its brands and the
protection of intellectual property rights;
|
|
identifying, securing and retaining
management and franchise agreements;
|
|
political and economic developments;
|
|
managing changes in key personnel and senior
management;
|
|
events that adversely impact domestic or
international travel;
|
|
reliance upon its proprietary reservations
system and exposure to the risk of failures in the system and increased
competition in reservations infrastructure;
|
|
technology and systems;
|
|
hotel industry supply and demand cycle;
|
|
a lack of selected development opportunities;
|
|
corporate responsibility;
|
|
litigation;
|
|
difficulties insuring the business;
|
|
the ability to borrow and satisfy debt
covenants;
|
|
compliance with data privacy regulations;
|
|
information security; and
|
|
funding in relation to the defined benefits
under its pension plans.
|
The current economic environment remains
tough and at present it is difficult to see any real signs of
improvement in
the industry trading outlook. Following the sharp deterioration in
trading in
the first quarter of 2009, there are some signs that occupancy is
stabilising
but forward booking visibility is poor and conditions for the rest of
the year
are likely to remain tough. IHG continues to sign new deals into the
pipeline
across all brands but the pace of movement through the pipeline is
slowing as a
result of financing restrictions and trading uncertainties. The Holiday
Inn
relaunch continues to make good progress and new rooms growth continues
to
deliver new revenue and 400 hotel openings are still expected in 2009.
IHG’s
focus on driving revenue share from its strong brands together with a
focus on
cash management and cost control will help IHG outperform during these
times of
economic uncertainty.
A copy of the IHG Annual Report and
Financial Statements 2008 is available at www.ihgplc.com.
Directors'
Responsibility Statement
The Directors confirm that to the best of
their knowledge:
- The condensed set of financial statements has
been prepared in accordance with IAS 34;
- The interim management report includes a fair
review of the important events during the first six months and a
description of the principal risks and uncertainties for the remaining
six months of the year, as required by DTR 4.2.7R; and
- The interim management report includes a fair
review of disclosure of related party transactions and changes therein,
as required by DTR 4.2.8R.
On behalf of the Board
Andrew
Cosslett
Richard
Solomons
Chief Executive
Chief Financial Officer and
Head
of Commercial Development
10 August 2009
10 August 2009
InterContinental Hotels Group PLC
GROUP
INCOME STATEMENT
For
the three months ended 30 June 2009
|
3 months ended 30 June 2009
|
3 months
ended 30 June 2008
|
|
Before
exceptional
items
|
Exceptional
items
(note 4)
|
Total
|
Before
exceptional
items
|
Exceptional
items
(note 4)
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
(note 3)
|
375
|
-
|
375
|
515
|
-
|
515
|
Cost of sales
|
(176)
|
-
|
(176)
|
(226)
|
-
|
(226)
|
Administrative
expenses
|
(67)
|
(13)
|
(80)
|
(101)
|
(5)
|
(106)
|
Other operating
income and expenses
|
1
|
-
|
1
|
4
|
12
|
16
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
133
|
(13)
|
120
|
192
|
7
|
199
|
Depreciation and
amortisation
|
(26)
|
-
|
(26)
|
(28)
|
(1)
|
(29)
|
Impairment
|
-
|
(162)
|
(162)
|
-
|
-
|
-
|
|
_____
|
_____
|
____
|
_____
|
_____
|
____
|
|
|
|
|
|
|
|
Operating
profit/(loss) (note 3)
|
107
|
(175)
|
(68)
|
164
|
6
|
170
|
Financial income
|
1
|
-
|
1
|
3
|
-
|
3
|
Financial expenses
|
(15)
|
-
|
(15)
|
(28)
|
-
|
(28)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
|
|
|
|
|
Profit/(loss)
before tax (note 3)
|
93
|
(175)
|
(82)
|
139
|
6
|
145
|
|
|
|
|
|
|
|
Tax (note 5)
|
(19)
|
43
|
24
|
(39)
|
(5)
|
(44)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
|
|
|
|
|
Profit/(loss)
for the period from continuing operations
|
74
|
(132)
|
(58)
|
100
|
1
|
101
|
|
|
|
|
|
|
|
Profit for
the period from discontinued operations
|
-
|
2
|
2
|
-
|
-
|
-
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Profit/(loss)
for the period attributable to the equity holders of the parent
|
74
|
(130)
|
(56)
|
100
|
1
|
101
|
|
====
|
====
|
====
|
====
|
====
|
====
|
Earnings
per ordinary share
(note 6)
|
|
|
|
|
|
|
Continuing
operations:
|
|
|
|
|
|
|
|
Basic
|
|
|
(20.4)¢
|
|
|
34.8¢
|
|
Diluted
|
|
|
(19.9)¢
|
|
|
34.1¢
|
|
Adjusted
|
26.0¢
|
|
|
34.5¢
|
|
|
|
Adjusted diluted
|
25.4¢
|
|
|
33.8¢
|
|
|
Total operations:
|
|
|
|
|
|
|
|
Basic
|
|
|
(19.6)¢
|
|
|
34.8¢
|
|
Diluted
|
|
|
(19.2)¢
|
|
|
34.1¢
|
|
Adjusted
|
26.0¢
|
|
|
34.5¢
|
|
|
|
Adjusted diluted
|
25.4¢
|
|
|
33.8¢
|
|
|
|
====
|
|
====
|
====
|
|
====
|
InterContinental Hotels Group PLC
GROUP INCOME STATEMENT
For
the six months ended 30 June 2009
|
6 months
ended 30 June 2009
|
6 months
ended 30 June 2008
|
|
Before
exceptional
items
|
Exceptional
items
(note 4)
|
Total
|
Before
exceptional
items
|
Exceptional
items
(note 4)
|
Total
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
Continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
(note 3)
|
726
|
-
|
726
|
974
|
-
|
974
|
Cost of sales
|
(358)
|
-
|
(358)
|
(439)
|
-
|
(439)
|
Administrative
expenses
|
(140)
|
(39)
|
(179)
|
(192)
|
(14)
|
(206)
|
Other operating
income and expenses
|
2
|
-
|
2
|
5
|
12
|
17
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
230
|
(39)
|
191
|
348
|
(2)
|
346
|
Depreciation and
amortisation
|
(51)
|
-
|
(51)
|
(57)
|
(2)
|
(59)
|
Impairment
|
-
|
(162)
|
(162)
|
-
|
-
|
-
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
|
|
|
|
|
|
Operating
profit/(loss) (note 3)
|
179
|
(201)
|
(22)
|
291
|
(4)
|
287
|
Financial income
|
2
|
-
|
2
|
6
|
-
|
6
|
Financial expenses
|
(30)
|
-
|
(30)
|
(61)
|
-
|
(61)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
|
|
|
|
|
|
Profit/(loss)
before tax (note 3)
|
151
|
(201)
|
(50)
|
236
|
(4)
|
232
|
|
|
|
|
|
|
|
Tax (note 5)
|
(33)
|
48
|
15
|
(67)
|
(2)
|
(69)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
Profit/(loss)
for the period from continuing operations
|
118
|
(153)
|
(35)
|
169
|
(6)
|
163
|
|
|
|
|
|
|
|
Profit for the
period from discontinued operations
|
-
|
6
|
6
|
-
|
-
|
-
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
Profit/(loss)
for the period attributable to the equity holders of the parent
|
118
|
(147)
|
(29)
|
169
|
(6)
|
163
|
|
====
|
====
|
====
|
====
|
====
|
====
|
Earnings
per ordinary share
(note 6)
|
|
|
|
|
|
|
Continuing
operations:
|
|
|
|
|
|
|
|
Basic
|
|
|
(12.3)¢
|
|
|
56.0¢
|
|
Diluted
|
|
|
(12.1)¢
|
|
|
54.9¢
|
|
Adjusted
|
41.5¢
|
|
|
58.1¢
|
|
|
|
Adjusted diluted
|
40.7¢
|
|
|
56.9¢
|
|
|
Total operations:
|
|
|
|
|
|
|
|
Basic
|
|
|
(10.2)¢
|
|
|
56.0¢
|
|
Diluted
|
|
|
(10.0)¢
|
|
|
54.9¢
|
|
Adjusted
|
41.5¢
|
|
|
58.1¢
|
|
|
|
Adjusted diluted
|
40.7¢
|
|
|
56.9¢
|
|
|
|
====
|
|
====
|
====
|
|
====
|
InterContinental Hotels Group PLC
GROUP
STATEMENT OF COMPREHENSIVE INCOME
For
the six months ended 30 June 2009
|
2009
6 months
ended
30 June
$m
|
2008
6 months
ended
30 June
restated*
$m
|
|
|
|
(Loss)/profit
for the period
|
(29)
|
163
|
|
|
|
Other
comprehensive income
|
|
|
Gains on valuation
of available-for-sale assets
|
9
|
7
|
Losses on disposal
of available-for sale assets
|
-
|
(15)
|
Cash flow hedges:
|
|
|
|
(Losses)/gains
arising during the period
|
(3)
|
2
|
|
Transferred to
financial expenses
|
7
|
1
|
Actuarial losses on
defined benefit pension plans, net of asset restriction
|
(15)
|
(66)
|
Exchange
differences on retranslation of foreign operations
|
12
|
22
|
Tax related to
above components of other comprehensive income:
|
|
|
|
Actuarial losses
|
(1)
|
2
|
Tax related to
share schemes
|
-
|
2
|
Tax related to
pension contributions
|
-
|
7
|
|
____
|
____
|
Other
comprehensive income/(loss) for the period
|
9
|
(38)
|
|
____
|
____
|
Total
comprehensive (loss)/income for the period
|
(20)
|
125
|
|
====
|
====
|
Attributable to:
|
|
|
|
Equity holders of
the parent
|
(19)
|
125
|
|
Minority equity
interest
|
(1)
|
-
|
|
|
____
|
____
|
|
|
(20)
|
125
|
|
|
====
|
====
|
*
|
Restated for IFRIC
14 (note 1).
|
InterContinental Hotels Group PLC
GROUP
STATEMENT OF CHANGES IN EQUITY
For
the six months ended 30 June 2009
|
6 months
ended 30 June 2009
|
|
Equity share
capital
|
Other
reserves*
|
Retained
earnings
|
Minority
interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
At beginning of the
period
|
118
|
(2,748)
|
2,624
|
7
|
1
|
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
26
|
(45)
|
(1)
|
(20)
|
Issue of ordinary
shares
|
3
|
-
|
-
|
-
|
3
|
Movement in shares
in employee share trusts
|
-
|
44
|
(44)
|
-
|
-
|
Equity-settled
share-based cost, net of payments
|
-
|
-
|
8
|
-
|
8
|
Equity dividends
paid
|
-
|
-
|
(83)
|
-
|
(83)
|
Exchange adjustments
|
16
|
(16)
|
-
|
-
|
-
|
|
____
|
____
|
____
|
____
|
____
|
At end
of the period
|
137
|
(2,694)
|
2,460
|
6
|
(91)
|
|
====
|
====
|
====
|
====
|
====
|
|
6 months
ended 30 June 2008
|
|
Equity share
capital
|
Other
reserves*
|
Retained
earnings
|
Minority
interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
At beginning of the
period
|
163
|
(2,720)
|
2,649
|
6
|
98
|
|
|
|
|
|
|
Total comprehensive
income for the period
|
-
|
17
|
108
|
-
|
125
|
Issue of ordinary
shares
|
2
|
-
|
-
|
-
|
2
|
Purchase of own
shares
|
(3)
|
-
|
(136)
|
-
|
(139)
|
Transfer to capital
redemption reserve
|
-
|
3
|
(3)
|
-
|
-
|
Movement in shares
in employee share trusts
|
-
|
29
|
(39)
|
-
|
(10)
|
Equity-settled
share-based cost, net of payments
|
-
|
-
|
12
|
-
|
12
|
Equity dividends
paid
|
-
|
-
|
(86)
|
-
|
(86)
|
Exchange adjustments
|
(1)
|
1
|
-
|
-
|
-
|
|
____
|
____
|
____
|
____
|
____
|
At end
of the period
|
161
|
(2,670)
|
2,505
|
6
|
2
|
|
====
|
====
|
====
|
====
|
====
|
*
|
Other reserves
comprise the capital redemption reserve, shares held by employee share
trusts, other reserves, unrealised gains and losses reserve and
currency translation reserve.
|
InterContinental Hotels Group PLC
GROUP
STATEMENT OF CASH FLOWS
For
the six months ended 30 June 2009
|
2009
6 months
ended 30 June
|
2008
6 months
ended 30 June
|
|
$m
|
$m
|
|
|
|
(Loss)/profit
for the period
|
(29)
|
163
|
Adjustments for:
|
|
|
|
Net financial
expenses
|
28
|
55
|
|
Income tax
(credit)/charge
|
(15)
|
69
|
|
Gain on disposal of
assets
|
(6)
|
-
|
|
Exceptional
operating items before depreciation
|
201
|
2
|
|
Depreciation and
amortisation
|
51
|
59
|
|
Equity settled
share-based cost, net of payments
|
8
|
12
|
|
_____
|
_____
|
Operating cash flow
before movements in working capital
|
238
|
360
|
Increase in net
working capital
|
(34)
|
(8)
|
Retirement benefit
contributions, net of cost
|
-
|
(25)
|
Cash flows relating
to exceptional operating items
|
(43)
|
(17)
|
|
_____
|
_____
|
Cash
flow from operations
|
161
|
310
|
Interest paid
|
(28)
|
(58)
|
Interest received
|
1
|
6
|
Tax (paid)/received
on operating activities
|
(43)
|
30
|
|
_____
|
_____
|
Net
cash from operating activities
|
91
|
288
|
|
_____
|
_____
|
Cash
flow from investing activities
|
|
|
Purchases of
property, plant and equipment
|
(15)
|
(11)
|
Purchase of
intangible assets
|
(24)
|
(22)
|
Investment in
associates and other financial assets
|
(1)
|
(5)
|
Proceeds from
associates and other financial assets
|
12
|
28
|
|
_____
|
_____
|
Net
cash from investing activities
|
(28)
|
(10)
|
|
_____
|
_____
|
Cash
flow from financing activities
|
|
|
Proceeds from the
issue of share capital
|
1
|
2
|
Purchase of own
shares
|
-
|
(131)
|
Purchase of own
shares by employee share trusts
|
(3)
|
(12)
|
Proceeds on release
of own shares by employee share trusts
|
1
|
2
|
Dividends paid to
shareholders
|
(83)
|
(86)
|
Increase in
borrowings
|
54
|
11
|
|
_____
|
_____
|
Net
cash from financing activities
|
(30)
|
(214)
|
|
_____
|
_____
|
|
|
|
Net
movement in cash and cash equivalents in the period
|
33
|
64
|
Cash and cash
equivalents at beginning of the period
|
82
|
105
|
Exchange rate
effects
|
(6)
|
(4)
|
|
_____
|
_____
|
Cash
and cash equivalents at end of the period
|
109
|
165
|
|
=====
|
=====
|
InterContinental Hotels Group PLC
GROUP
STATEMENT OF FINANCIAL POSITION
30
June 2009
|
2009
30 June
|
2008
30 June
restated*
|
2008
31 December
|
|
$m
|
$m
|
$m
|
ASSETS
|
|
|
|
Property, plant and
equipment
|
1,854
|
1,843
|
1,684
|
Goodwill
|
95
|
228
|
143
|
Intangible assets
|
284
|
342
|
302
|
Investment in
associates
|
44
|
50
|
43
|
Retirement benefit
assets
|
23
|
16
|
40
|
Other financial
assets
|
155
|
173
|
152
|
|
_____
|
_____
|
_____
|
Total
non-current assets
|
2,455
|
2,652
|
2,364
|
|
_____
|
_____
|
_____
|
Inventories
|
4
|
5
|
4
|
Trade and other
receivables
|
437
|
489
|
412
|
Current tax
receivable
|
45
|
27
|
36
|
Cash and cash
equivalents
|
109
|
165
|
82
|
Other financial
assets
|
5
|
18
|
10
|
|
_____
|
_____
|
_____
|
Total
current assets
|
600
|
704
|
544
|
|
|
|
|
Non-current assets
classified as held for sale
|
22
|
239
|
210
|
|
______
|
______
|
______
|
Total
assets (note 3)
|
3,077
|
3,595
|
3,118
|
|
=====
|
=====
|
=====
|
LIABILITIES
|
|
|
|
Loans and other
borrowings
|
(22)
|
(17)
|
(21)
|
Trade and other
payables
|
(739)
|
(783)
|
(746)
|
Current tax payable
|
(341)
|
(428)
|
(374)
|
|
_____
|
_____
|
_____
|
Total
current liabilities
|
(1,102)
|
(1,228)
|
(1,141)
|
|
_____
|
_____
|
_____
|
Loans and other
borrowings
|
(1,415)
|
(1,771)
|
(1,334)
|
Retirement benefit
obligations
|
(133)
|
(124)
|
(129)
|
Trade and other
payables
|
(400)
|
(305)
|
(392)
|
Deferred tax payable
|
(118)
|
(150)
|
(117)
|
|
_____
|
_____
|
_____
|
Total
non-current liabilities
|
(2,066)
|
(2,350)
|
(1,972)
|
|
|
|
|
Liabilities
classified as held for sale
|
-
|
(15)
|
(4)
|
|
_____
|
_____
|
_____
|
Total
liabilities
|
(3,168)
|
(3,593)
|
(3,117)
|
|
=====
|
=====
|
=====
|
Net
(liabilities)/assets
|
(91)
|
2
|
1
|
|
=====
|
=====
|
=====
|
EQUITY
|
|
|
|
Equity share capital
|
137
|
161
|
118
|
Capital redemption
reserve
|
11
|
13
|
10
|
Shares held by
employee share trusts
|
(7)
|
(53)
|
(49)
|
Other reserves
|
(2,905)
|
(2,918)
|
(2,890)
|
Unrealised gains
and losses reserve
|
23
|
33
|
9
|
Currency
translation reserve
|
184
|
255
|
172
|
Retained earnings
|
2,460
|
2,505
|
2,624
|
|
______
|
______
|
______
|
IHG
shareholders’ equity
|
(97)
|
(4)
|
(6)
|
Minority equity
interest
|
6
|
6
|
7
|
|
______
|
______
|
______
|
Total
equity
|
(91)
|
2
|
1
|
|
=====
|
=====
|
=====
|
*
|
Restated for IFRIC
14 (note 1).
|
InterContinental Hotels Group plc
NOTES
TO THE INTERIM FINANCIAL STATEMENTS
1.
|
Basis
of preparation
|
|
These condensed
interim financial statements have been prepared in accordance with the
Disclosure and Transparency Rules of the United Kingdom’s Financial
Services Authority and IAS 34 ‘Interim Financial Reporting’. Other than the changes listed below, they have
been prepared on a consistent basis using the accounting policies set
out in the InterContinental Hotels Group (the Group or IHG) Annual
Report and Financial Statements for the year ended 31 December 2008.
With effect from 1
January 2009, the Group has implemented IAS 1 (Revised) ‘Presentation
of Financial Statements’, IAS 23 (Revised) ‘Borrowing Costs’, IFRS 8
‘Operating Segments’ and IFRIC 13 ‘Customer Loyalty Programmes’. Except for certain presentational changes,
including the introduction of a ‘Group Statement of Changes in Equity’
as a primary financial statement, the adoption of these standards has
had no material impact on the financial statements and there has been
no requirement to restate prior year comparatives.
Following the
adoption of IFRIC 14 ‘IAS 19 – The limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction’ at 31 December
2007, the 30 June 2008 Statement of Financial Position has been amended
to show the retirement benefit assets net of tax previously recorded
within deferred tax payable. There have
been corresponding changes to the actuarial gains and related tax
reported in the restated Group Statement of Comprehensive Income for
the six months ended 30 June 2008. There
is no change to previously reported net assets or income.
These condensed
interim financial statements are unaudited and do not constitute
statutory accounts of the Group within the meaning of Section 240 of
the Companies Act 1985. The auditors have
carried out a review of the financial information in accordance with
the guidance contained in ISRE 2410 (UK
and Ireland)
‘Review of Interim Financial Information Performed by the Independent
Auditor of the Entity’ issued by the Auditing Practices Board.
The financial
information for the year ended 31 December 2008 has been extracted from
the Group’s published financial statements for that year which contain
an unqualified audit report and which have been filed with the
Registrar of Companies.
Two hotels, which
were previously classified as assets held for sale and whose results
were presented as discontinued operations, no longer meet the criteria
for designation as held for sale assets. Consequently,
the results of these hotels are now reported as continuing operations
and comparative data has been represented on a consistent basis. The impact has been to increase revenue from
continuing operations for the three months ended 30 June by $8m (2008
$11m) and for the six months ended 30 June by $17m (2008 $22m) and to
increase operating profit from continuing operations, before
exceptional items, for the three months ended 30 June by $2m (2008 $4m)
and for the six months ended 30 June by $5m (2008 $7m).
|
2.
|
Exchange
rates
|
|
The results of
operations have been translated into US dollars at the average rates of
exchange for the period. In the case of
sterling, the translation rate for the six months ended 30 June is $1=
£0.67 (2009 3 months, $1 = £0.65; 2008 6 months, $1 =
£0.51; 2008 3 months, $1=£0.51). In
the case of the euro, the translation rate for the six months ended 30
June is $1 = €0.75 (2009 3 months, $1 = €0.73; 2008 6 months, $1 =
€0.65; 2008 3 months, $1 = €0.64).
Assets and
liabilities have been translated into US dollars at the rates of
exchange on the last day of the period. In
the case of sterling, the translation rate is $1=£0.60 (2008 31
December $1 = £0.69; 30 June $1 = £0.50).
In the case of the euro, the translation rate is $1
= €0.71 (2008 31 December $1 = €0.71; 30 June $1= €0.63).
|
3.
|
Segmental
information
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
2009
3 months
ended 30 June
|
2008
3 months
ended 30 June
|
2009
6 months
ended 30 June
|
2008
6 months
ended 30 June
|
|
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
Americas
|
196
|
258
|
375
|
499
|
|
EMEA
|
99
|
156
|
186
|
271
|
|
Asia Pacific
|
50
|
69
|
106
|
141
|
|
Central
|
30
|
32
|
59
|
63
|
|
|
____
|
____
|
____
|
____
|
|
Total
revenue
|
375
|
515
|
726
|
974
|
|
|
====
|
====
|
====
|
====
|
|
|
|
|
|
|
|
All results relate
to continuing operations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit
|
|
|
2009
3 months
ended 30 June
$m
|
2008
3 months
ended 30 June
$m
|
2009
6 months
ended 30 June
$m
|
2008
6 months
ended 30 June
$m
|
|
|
|
|
|
|
|
Americas
|
86
|
134
|
149
|
249
|
|
EMEA
|
34
|
59
|
58
|
89
|
|
Asia Pacific
|
7
|
12
|
17
|
29
|
|
Central
|
(20)
|
(41)
|
(45)
|
(76)
|
|
|
____
|
___
|
____
|
____
|
|
Reportable
segments’ operating profit
|
107
|
164
|
179
|
291
|
|
Exceptional
operating items (note 4)
|
(175)
|
6
|
(201)
|
(4)
|
|
|
____
|
____
|
____
|
____
|
|
Operating
(loss)/profit
|
(68)
|
170
|
(22)
|
287
|
|
|
|
|
|
|
|
Financial income
|
1
|
3
|
2
|
6
|
|
Financial expenses
|
(15)
|
(28)
|
(30)
|
(61)
|
|
|
____
|
____
|
____
|
____
|
|
Total
(loss)/profit before tax
|
(82)
|
145
|
(50)
|
232
|
|
|
====
|
====
|
====
|
====
|
|
|
|
|
|
|
|
All results relate
to continuing operations.
|
|
|
|
|
|
|
|
|
|
|
|
Assets
|
2009
30 June
$m
|
2008
30 June
restated*
$m
|
2008
31 December
$m
|
|
Americas
|
1,120
|
1,350
|
1,240
|
|
EMEA
|
988
|
1,204
|
958
|
|
Asia Pacific
|
617
|
684
|
613
|
|
Central
|
198
|
165
|
189
|
|
|
____
|
____
|
____
|
|
Segment
assets
|
2,923
|
3,403
|
3,000
|
|
|
|
|
|
|
Unallocated assets:
|
|
|
|
|
Current tax
receivable
|
45
|
27
|
36
|
|
Cash and cash
equivalents
|
109
|
165
|
82
|
|
|
____
|
____
|
____
|
|
Total
assets
|
3,077
|
3,595
|
3,118
|
|
|
====
|
====
|
====
|
*
|
Restated for IFRIC
14 (note 1).
|
4.
|
Exceptional
items
|
|
|
2009
3 months
ended 30 June
$m
|
2008
3 months
ended 30 June
$m
|
2009
6 months
ended 30 June
$m
|
2008
6 months
ended 30 June
$m
|
|
Continuing
operations:
|
|
|
|
|
|
|
|
|
|
|
|
Exceptional
operating items
|
|
|
|
|
|
|
Administrative
expenses:
|
|
|
|
|
|
|
Holiday Inn brand
relaunch (a)
|
(9)
|
(3)
|
(14)
|
(9)
|
|
|
Office
reorganisations (b)
|
-
|
(2)
|
-
|
(5)
|
|
|
Enhanced pensions
transfer (c)
|
-
|
-
|
(21)
|
-
|
|
|
Severance costs (d)
|
(4)
|
-
|
(4)
|
-
|
|
|
|
____
|
____
|
____
|
____
|
|
|
|
(13)
|
(5)
|
(39)
|
(14)
|
|
|
Other operating
income and expenses:
|
|
|
|
|
|
|
Gain on sale of
other financial assets
|
-
|
12
|
-
|
12
|
|
|
|
|
|
|
|
|
Depreciation and
amortisation:
|
|
|
|
|
|
|
Office
reorganisations (b)
|
-
|
(1)
|
-
|
(2)
|
|
|
|
|
|
|
|
|
|
Impairment:
|
|
|
|
|
|
|
Property, plant and
equipment (e)
|
(28)
|
-
|
(28)
|
-
|
|
|
Goodwill (f)
|
(57)
|
-
|
(57)
|
|
|
|
Intangible assets
(g)
|
(32)
|
-
|
(32)
|
-
|
|
|
On reclassification
of hotels from assets held for sale (h)
|
(45)
|
-
|
(45)
|
|
|
|
|
____
|
____
|
____
|
____
|
|
|
|
(162)
|
-
|
(162)
|
-
|
|
|
|
____
|
____
|
____
|
____
|
|
|
(175)
|
6
|
(201)
|
(4)
|
|
|
====
|
====
|
====
|
====
|
|
Tax
|
|
|
|
|
|
Tax on exceptional
operating items
|
43
|
(5)
|
48
|
(2)
|
|
|
====
|
====
|
====
|
====
|
|
Discontinued
operations:
|
|
|
|
|
|
Gain on disposal of
assets:
|
|
|
|
|
|
Gain on disposal of
hotels (i)
|
2
|
-
|
2
|
-
|
|
Tax credit
|
-
|
-
|
4
|
-
|
|
|
____
|
____
|
____
|
____
|
|
|
2
|
-
|
6
|
-
|
|
|
====
|
====
|
====
|
====
|
|
|
|
|
|
|
|
|
|
These items are
treated as exceptional by reason of their size or nature.
|
|
a)
|
Relates to costs
incurred in support of the worldwide relaunch of the Holiday Inn brand
family that was announced on 24 October 2007.
|
|
b)
|
Related to
costs incurred on the relocation of the Group’s head office and the
closure of its Aylesbury facility.
|
|
c)
|
Relates to
the payment of enhanced pension transfers to those deferred members of
the InterContinental Hotels UK Pension Plan who had accepted an offer
to receive the enhancement either as a cash lump sum or as an
additional transfer value to an alternative pension plan provider. The exceptional item comprises the lump sum
payments, the IAS 19 settlement loss arising on the pension transfers
and the costs of the arrangement. The
payments and transfers were made in January 2009.
|
|
d)
|
Severance
costs relate to redundancies arising from a review of the Group’s cost
base in light of the current economic climate.
|
|
e)
|
Comprises
$20m relating to a North American hotel and $8m relating to a European
hotel and arises from a review of estimated recoverable amounts taking
into account the current economic climate.
|
|
f)
|
Arises in
respect of the Americas
managed cash-generating unit and reflects revised fee expectations in
light of the current economic climate. Estimated
future cash flows have been discounted at 12.5%.
|
|
g)
|
Relates to
the capitalised value of management contracts accounted for as
intangible assets and arises from a revision to expected fee income. Estimated future cash flows have been
discounted at 12.5%. The charge relates to
the Americas
business segment.
|
|
h)
|
Relates to
the valuation adjustments required on the reclassification to property,
plant and equipment of four North American hotels no longer meeting the
‘held for sale’ criteria of IFRS 5 ‘Non-current Assets Held for Sale
and Discontinued Operations’ as sales are no longer considered highly
probable within the next 12 months. The
adjustments comprise $14m of depreciation not charged whilst held for
sale and $31m of further write-downs to recoverable amounts, as
required by IFRS 5. The results of two of
the hotels, previously classified as discontinued operations, are now
reported as continuing operations and prior year results have been
represented on a consistent basis.
|
|
i)
|
Relates to
the release of provisions no longer required in respect of hotels
disposed of in prior years.
|
5.
|
Tax
|
|
The tax charge on
the combined profit from continuing and discontinued operations,
excluding the impact of exceptional items (note 4), has been calculated
using an estimated effective annual tax rate of 22% (2008 28%) analysed
as follows.
|
|
|
2009
|
2009
|
2009
|
2008
|
2008
|
2008
|
|
3
months ended 30 June
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
|
Before
exceptional items
|
|
|
|
|
|
|
|
Continuing
operations
|
93
|
(19)
|
20%
|
139
|
(39)
|
28%
|
|
|
|
|
|
|
|
|
|
Exceptional
items
|
|
|
|
|
|
|
|
Continuing
operations
|
(175)
|
43
|
|
6
|
(5)
|
|
|
Discontinued
operations
|
2
|
-
|
|
-
|
-
|
|
|
|
____
|
____
|
|
____
|
____
|
|
|
|
(80)
|
24
|
|
145
|
(44)
|
|
|
|
====
|
====
|
|
====
|
====
|
|
|
Analysed as:
|
|
|
|
|
|
|
|
|
UK tax
|
|
(6)
|
|
|
(13)
|
|
|
|
Foreign tax
|
|
30
|
|
|
(31)
|
|
|
|
|
____
|
|
|
____
|
|
|
|
|
24
|
|
|
(44)
|
|
|
|
|
====
|
|
|
====
|
|
|
|
2009
|
2009
|
2009
|
2008
|
2008
|
2008
|
|
6
months ended 30 June
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
|
Before
exceptional items
|
|
|
|
|
|
|
|
Continuing
operations
|
151
|
(33)
|
22%
|
236
|
(67)
|
28%
|
|
|
|
|
|
|
|
|
|
Exceptional
items
|
|
|
|
|
|
|
|
Continuing
operations
|
(201)
|
48
|
|
(4)
|
(2)
|
|
|
Discontinued
operations
|
2
|
4
|
|
-
|
-
|
|
|
|
____
|
____
|
|
____
|
____
|
|
|
|
(48)
|
19
|
|
232
|
(69)
|
|
|
|
====
|
====
|
|
====
|
====
|
|
|
Analysed as:
|
|
|
|
|
|
|
|
|
UK tax
|
|
(2)
|
|
|
(17)
|
|
|
|
Foreign tax
|
|
21
|
|
|
(52)
|
|
|
|
|
____
|
|
|
____
|
|
|
|
|
19
|
|
|
(69)
|
|
|
|
|
====
|
|
|
====
|
|
|
By also excluding
the effect of prior year items, the equivalent effective tax rate would
be approximately 39% (2008 6 months ended 30 June 37%; year ended 31
December 39%). Prior year items have been
treated as relating wholly to continuing operations.
|
6.
|
Earnings
per ordinary share
|
|
Basic earnings per
ordinary share is calculated by dividing the profit for the period
available for IHG equity holders by the weighted average number of
ordinary shares, excluding investment in own shares, in issue during
the period.
Diluted earnings
per ordinary share is calculated by adjusting basic earnings per
ordinary share to reflect the notional exercise of the weighted average
number of dilutive ordinary share options outstanding during the period.
Adjusted earnings
per ordinary share is disclosed in order to show performance
undistorted by exceptional items, to give a more meaningful comparison
of the Group’s performance.
|
|
|
|
2009
|
|
2008
|
|
|
3 months
ended
30 June
|
3 months
ended
30 June
|
|
|
Continuing
operations
|
Total
|
Continuing
operations
|
Total
|
|
|
|
|
|
Basic
earnings per share
|
|
|
|
|
|
(Loss)/profit
available for equity holders ($m)
|
(58)
|
(56)
|
101
|
101
|
|
Basic weighted
average number of ordinary shares (millions)
|
285
|
285
|
290
|
290
|
|
Basic earnings per
share (cents)
|
(20.4)
|
(19.6)
|
34.8
|
34.8
|
|
|
====
|
=====
|
====
|
=====
|
|
|
|
|
|
|
|
Diluted
earnings per share
|
|
|
|
(Loss)/profit
available for equity holders ($m)
|
(58)
|
(56)
|
101
|
101
|
|
Diluted weighted
average number of ordinary shares (millions)
|
291
|
291
|
296
|
296
|
|
Diluted earnings
per share (cents)
|
(19.9)
|
(19.2)
|
34.1
|
34.1
|
|
|
====
|
=====
|
====
|
=====
|
|
Adjusted
earnings per share
|
|
|
|
|
(Loss)/profit
available for equity holders ($m)
|
(58)
|
(56)
|
101
|
101
|
|
Adjusting items
(note 4):
|
|
|
|
|
|
|
Exceptional
operating items ($m)
|
175
|
175
|
(6)
|
(6)
|
|
|
Tax ($m)
|
(43)
|
(43)
|
5
|
5
|
|
|
Gain on disposal of
assets, net of tax ($m)
|
-
|
(2)
|
-
|
-
|
|
|
____
|
____
|
____
|
____
|
|
Adjusted earnings
($m)
|
74
|
74
|
100
|
100
|
|
Basic weighted
average number of ordinary
shares (millions)
|
285
|
285
|
290
|
290
|
|
Adjusted earnings
per share (cents)
|
26.0
|
26.0
|
34.5
|
34.5
|
|
|
====
|
====
|
====
|
====
|
|
Diluted weighted
average number of ordinary
shares (millions)
|
291
|
291
|
296
|
296
|
|
Adjusted diluted
earnings per share (cents)
|
25.4
|
25.4
|
33.8
|
33.8
|
|
|
====
|
====
|
====
|
====
|
6.
|
Earnings
per ordinary share (continued)
|
|
|
|
|
|
|
|
2009
|
|
2008
|
|
|
6 months
ended
30 June
|
6 months
ended
30 June
|
|
|
Continuing
operations
|
Total
|
Continuing
operations
|
Total
|
|
|
|
|
|
|
|
Basic
earnings per share
|
|
|
|
|
|
(Loss)/profit
available for equity holders ($m)
|
(35)
|
(29)
|
163
|
163
|
|
Basic weighted
average number of ordinary shares (millions)
|
284
|
284
|
291
|
291
|
|
Basic earnings per
share (cents)
|
(12.3)
|
(10.2)
|
56.0
|
56.0
|
|
|
====
|
====
|
====
|
====
|
|
Diluted
earnings per share
|
|
|
|
|
|
(Loss)/profit
available for equity holders ($m)
|
(35)
|
(29)
|
163
|
163
|
|
Diluted weighted
average number of ordinary shares (millions)
|
290
|
290
|
297
|
297
|
|
Diluted earnings
per share (cents)
|
(12.1)
|
(10.0)
|
54.9
|
54.9
|
|
|
====
|
====
|
====
|
====
|
|
Adjusted
earnings per share
|
|
|
|
|
|
(Loss)/profit
available for equity holders ($m)
|
(35)
|
(29)
|
163
|
163
|
|
Adjusting items
(note 4):
|
|
|
|
|
|
|
Exceptional
operating items ($m)
|
201
|
201
|
4
|
4
|
|
|
Tax ($m)
|
(48)
|
(48)
|
2
|
2
|
|
|
Gain on disposal of
assets, net of tax ($m)
|
-
|
(6)
|
-
|
-
|
|
|
____
|
____
|
____
|
____
|
|
Adjusted earnings
($m)
|
118
|
118
|
169
|
169
|
|
Basic weighted
average number of ordinary shares (millions)
|
284
|
284
|
291
|
291
|
|
Adjusted earnings
per share (cents)
|
41.5
|
41.5
|
58.1
|
58.1
|
|
|
====
|
====
|
====
|
====
|
|
Diluted weighted
average number of ordinary shares (millions)
|
290
|
290
|
297
|
297
|
|
Adjusted diluted
earnings per share (cents)
|
40.7
|
40.7
|
56.9
|
56.9
|
|
|
====
|
====
|
====
|
====
|
|
Earnings
per share from discontinued operations
|
2009
3 months
ended
30 June
cents per
share
|
2008
3 months
ended
30 June
cents per
share
|
2009
6 months
ended
30 June
cents per
share
|
2008
6 months
ended
30 June
cents per
share
|
|
Basic
|
0.8
|
-
|
2.1
|
-
|
|
Diluted
|
0.7
|
-
|
2.1
|
-
|
|
|
====
|
====
|
====
|
====
|
|
The diluted
weighted average number of ordinary shares is calculated as:
|
|
|
2009
3 months
ended
30 June
millions
|
2008
3 months
ended
30 June
millions
|
2009
6 months
ended
30 June
millions
|
2008
6 months
ended
30 June
millions
|
|
Basic weighted
average number of ordinary shares
|
285
|
290
|
284
|
291
|
|
Dilutive potential
ordinary shares – employee share options
|
6
|
6
|
6
|
6
|
|
|
____
|
____
|
____
|
____
|
|
|
291
|
296
|
290
|
297
|
|
|
====
|
====
|
====
|
====
|
7.
|
Dividends
|
|
|
2009
6 months
ended
30 June
cents per
share
|
2008
6 months
ended
30 June
cents per
share
|
2009
6 months
ended
30 June
$m
|
2008
6 months
ended
30 June
$m
|
|
Paid during the
period:
|
|
|
|
|
|
Final (declared for
previous year)
|
29.2
|
29.2
|
83
|
86
|
|
|
====
|
====
|
====
|
====
|
|
Proposed for the
period:
|
|
|
|
|
|
Interim
|
12.2
|
12.2
|
35
|
35
|
|
|
====
|
====
|
====
|
====
|
8
|
Net debt
|
|
|
2009
30 June
|
2008
30 June
|
2008
31 December
|
|
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
Cash and cash
equivalents
|
109
|
165
|
82
|
|
Loans and other
borrowings – current
|
(22)
|
(17)
|
(21)
|
|
Loans and other
borrowings – non-current
|
(1,415)
|
(1,771)
|
(1,334)
|
|
|
____
|
____
|
____
|
|
Net debt
|
(1,328)
|
(1,623)
|
(1,273)
|
|
|
====
|
====
|
====
|
|
Finance lease
liability included above
|
(203)
|
(201)
|
(202)
|
|
|
====
|
====
|
====
|
9.
|
Movement
in net debt
|
|
|
2009
6 months
ended
30 June
|
2008
6 months
ended
30 June
|
2008
12 months
ended
31 December
|
|
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
Net increase in
cash and cash equivalents
|
33
|
64
|
25
|
|
Add back cash flows
in respect of other components of net debt:
|
|
|
|
|
(Increase)/decrease
in borrowings
|
(54)
|
(11)
|
316
|
|
|
____
|
____
|
____
|
|
(Increase)/decrease
in net debt arising from cash flows
|
(21)
|
53
|
341
|
|
|
|
|
|
|
Non-cash movements:
|
|
|
|
|
Finance lease
liability
|
(1)
|
(1)
|
(2)
|
|
Exchange and other
adjustments
|
(33)
|
(16)
|
47
|
|
|
____
|
____
|
____
|
|
(Increase)/decrease
in net debt
|
(55)
|
36
|
386
|
|
|
|
|
|
|
Net debt at
beginning of the period
|
(1,273)
|
(1,659)
|
(1,659)
|
|
|
____
|
____
|
____
|
|
Net
debt at end of the period
|
(1,328)
|
(1,623)
|
(1,273)
|
|
|
====
|
====
|
====
|
10.
|
Capital
commitments and contingencies
|
|
At 30 June 2009,
the amount contracted for but not provided for in the financial
statements for expenditure on property, plant and equipment was $16m
(2008 31 December $40m; 30 June $66m).
At 30 June 2009,
the Group had contingent liabilities of $36m (2008 31 December $12m; 30
June $19m) mainly relating to litigation claims.
In limited cases,
the Group may provide performance guarantees to third-party owners to
secure management contracts. The maximum
outstanding exposure under such guarantees is $223m (2008 31 December
$249m; 30 June $223m). Payments under any
such guarantees are charged to the income statement as incurred.
The Group has given
warranties in respect of the disposal of certain of its former
subsidiaries. It is the view of the
Directors that, other than to the extent that liabilities have been
provided for in these financial statements, such warranties are not
expected to result in material financial loss to the Group.
|
11.
|
Other
commitments
|
|
On 24 October 2007,
the Group announced a worldwide relaunch of its Holiday Inn brand
family. In support of this relaunch, IHG
will make a non recurring revenue investment of $60m which will be
charged to the Group income statement as an exceptional item. $48m has been incurred to date, including the
$14m charged in the first six months of 2009.
|
|
INDEPENDENT
REVIEW REPORT TO InterContinental
Hotels Group pLC
|
|
Introduction
We have been engaged by the Company to review the
condensed set of financial statements in the interim financial report
for the three and six months ended 30 June 2009 which comprises the
Group income statement, Group statement of changes in equity, Group
statement of comprehensive income, Group statement of cash flows, Group
statement of financial position and the related notes 1 to 11. We have read the other information contained
in the interim financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the information
in the condensed set of financial statements.
This report is made solely to the Company in accordance
with guidance contained in ISRE 2410 (UK
and Ireland)
‘Review of Interim Financial Information Performed by the Independent
Auditor of the Entity’ issued by the Auditing Practices Board. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our work, for this
report, or for the conclusions we have formed.
Directors' Responsibilities
The interim financial report is the responsibility of,
and has been approved by, the Directors. The
Directors are responsible for preparing the interim financial report in
accordance with the Disclosure and Transparency Rules of the United Kingdom’s
Financial Services Authority.
As disclosed in note 1, the annual financial statements
of the Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of
financial statements included in this interim financial report has been
prepared in accordance with International Accounting Standard 34,
‘Interim Financial Reporting’, as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company
a conclusion on the condensed set of financial statements in the
interim financial report based on our review.
Scope of Review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor of
the Entity’ issued by the Auditing Practices Board for use in the
United Kingdom. A review of interim
financial information consists of making enquiries, primarily of
persons responsible for financial and accounting matters, and applying
analytical and other review procedures. A
review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently
does not enable us to obtain assurance that we would become aware of
all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention
that causes us to believe that the condensed set of financial
statements in the interim financial report for the three and six months
ended 30 June 2009 is not prepared, in all material respects, in
accordance with International Accounting Standard 34 as adopted by the
European Union and the Disclosure and Transparency
Rules of the United Kingdom’s Financial Services
Authority.
Ernst & Young LLP
London
10 August 2009
|
|