News for the Hospitality Executive
IHG Posts a $141 million Net Income for the Six Months
Ended June 30
Compared with a Loss of $29 million in the Same Period a Year Earlier
Global RevPAR Up 3.9% Overall
and 7.4% in the 2nd Qtr,
Greater China Reporting RevPAR up 29.4% in the Half
London, 10 August 2010
• July global constant currency RevPAR of 8.1%; 6.4% Americas, 10.0% EMEA and 15.0% Asia Pacific.
• Powerful and distinct brands: The $1 billion relaunch of Holiday Inn remains on track. 2,585 hotels are now operating under the new Holiday Inn standards, 76% of the total estate. Relaunched hotels are performing at the top end of our expected range.
We continue to drive up the overall quality of the estate with 75,000 new rooms under construction of which c.140 hotels (21,000 rooms) are expected to open in the remainder of this year. 9,021 rooms (83 hotels) were removed from the system in the first half. Total room removals are still expected to be in the region of 40,000 in 2010.
• Leadership position in Greater China: with 132 hotels open and 148 in our development pipeline we continue to build our leading position in the region. Over 50% of our pipeline comprises our upscale brands, illustrating the potential speed of revenue growth from this rapidly expanding market.
• System delivery: this continued to improve with 68% of rooms revenue booked through IHG’s channels or by Priority Club Rewards members direct to hotel (2009: 66%). Priority Club Rewards members now total almost 52m (2009: 44m).
• Focus on efficiency: First half regional and central costs of $108m increased $9m at constant exchange rates ($12m at reported rates) due to higher performance based short term incentive costs. IHG is on track to maintain the c. $75m of sustainable savings achieved in 2009 across regional and central costs and managed and franchised cost of sales.
Commenting on the results, Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC said:
"Trading strengthened as the first half progressed with global Revenue per Available Room (RevPAR) up 3.9% overall and 7.4% in the second quarter. Asia is leading the recovery with Greater China reporting RevPAR up 29.4% in the half. As anticipated, occupancy drove RevPAR increases, with business travellers returning in greater numbers. Rates are now stabilising across the world, with most markets seeing rate growth towards the end of the first half. The economic environment does remain uncertain, however, with short booking windows and limited visibility.”
"During the downturn we worked closely with our owners to reduce costs, drive revenue and build the strength of our system and brands. In the first half we signed 130 hotels and opened 148, despite the tough financing environment. The quality of these new hotels is exceptionally high, particularly in China where both our pipeline and system of open hotels are skewed towards more upscale developments. We have now completed the relaunch of nearly 2,600 Holiday Inn hotels worldwide out of a total of 3,400, and the performance of these hotels continues to meet or beat our expectations.”
"These efforts put us in great shape to increase share in what is now a rising market. Having maintained the dividend through the recession and balancing the improvement in trading with the continued economic uncertainty, the Board is announcing an increase in the dividend of 5%."
Interest and tax
Based on the position at the end of the half, the tax charge has been calculated using an estimated annual tax rate of 28% (Estimated annual tax rate at H1 2009: 22%).
Cash flow & net debt
Following the 2009 actuarial review of the UK Pension Plan, the Company has agreed with the Plan Trustees to make additional contributions up to a total of £100m by 31 March 2017. The agreement includes three additional annual contributions of £10m payable over the period 2010-2012, a 7.5% share of net proceeds from the disposal of hotels and a top-up in 2017 to the £100m total if required. The scheme is formally valued every three years and any future valuations could lead to changes in the amounts payable.
During 2009 IHG extended the maturity and diversification of its debt profile issuing a seven year £250m bond in the fourth quarter using this to refinance $415m of the $500m term loan expiring in November 2010. In addition, IHG has a $1.6bn revolving credit facility expiring May 2013.
Please click here for the Appendix to the results and here to download the full announcement in PDF (1.54Mb).The full release and supplementary data is available on our website: www.ihg.com/interims10. To watch a video of Richard Solomons reviewing our results, visit our YouTube channel at www.youtube.com/ihgplc
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.
|Also See:||InterContinental Hotels 2009 Profit Falls 34% to $363 million (230 million pounds), Sales Totaled $1.5 billion, from $1.9 billion a Year Ago; RevPAR Fell 14.7% for the Year / Brand Operating Statistic / February 2010|