Financial summary1
|
2011
|
2010
|
% Change YoY
|
Actual
|
CER2
|
CER2 & excluding LDs3
|
Revenue
|
$850m
|
$772m
|
10%
|
8%
|
6%
|
Operating profit
|
$269m
|
$219m
|
23%
|
21%
|
17%
|
Total adjusted EPS
|
59.2¢
|
47.0¢
|
26%
|
|
|
Total basic EPS4
|
54.0¢
|
49.1¢
|
10%
|
|
|
Interim dividend per share
|
16.0¢5
|
12.8¢
|
25%5
|
|
|
Net debt
|
$818m
|
$1,019m
|
|
|
|
Richard Solomons, Chief Executive of InterContinental
Hotels Group PLC, said:
|
“In the first half we delivered a strong performance
across each of our regions, driven both by increased occupancy from
business
and leisure travellers as well as progressive rate improvement. Global revenue per available room (RevPAR)
grew 6.7% with Greater China up 12.7% and the US up 8.2%, where the
Holiday Inn
relaunch is delivering sustained outperformance.
“We continue to support our
owners, driving guests to our hotels through the most efficient
channels. Our
industry leading developments in mobile booking sites and apps are now
generating over $10m of revenue a month and we expect this to grow
quickly as
consumer booking preferences evolve.
“We
have realised over $140m in the year to date from the
sale of our interests in four hotels and have committed to invest over $70m
of capital behind our
brands, including the
roll out of Holiday Inn Express in India and a world class site for
Hotel
Indigo in New York.
“Our
priorities are to develop our brands, invest in
our people and strengthen our revenue delivery systems, thereby
creating firmer
foundations for growth. I have made a number of senior appointments
including Tom Singer as CFO and Tracy
Robbins our EVP Human Resources
and Global Operations Support will be joining the Board. Whilst we continue to monitor the uncertain
economic outlook, we look forward with confidence in the currently
favourable
hotel trading environment of record demand and low supply growth in
many
markets.”
|
Driving Market Share
|
•
|
Total gross revenue6 from hotels in IHG’s
system of $9.6bn, up 9%.
|
•
|
First half global RevPAR growth of 6.7%, 7.6% excluding
Egypt, Bahrain and Japan.
|
|
-
|
Americas 7.6% (including US 8.2%); EMEA 4.0%; Asia
Pacific 7.0%.
|
|
-
|
Second quarter global RevPAR growth of 6.5%, 7.4%
excluding Egypt, Bahrain and Japan.
|
|
-
|
Global rate growth of 2.1% in the first half, with 2.4%
in the second quarter.
|
•
|
System size 656,674 rooms (4,462 hotels); pipeline
186,116 rooms (1,190 hotels), 26% in Greater China.
|
|
-
|
24,519 rooms (122 hotels) added, including 6,986 rooms (2
hotels) from the first InterContinental Alliance Resorts in Las Vegas;
and 15,006 rooms (97 hotels) removed.
|
|
-
|
Signings of 21,139 rooms (148 hotels) were ahead of H1
2010.
|
|
-
|
2011 net system growth still expected to be modest, with
annual medium term growth from 2012 of 3%-5%.
|
|
Growing Margins
|
•
|
Sustainable efficiencies drive fee-based margins6
up 0.9% pts to 40.6%.
|
|
-
|
Regional and central costs of $129m increased $16m on
2010 at constant currency ($21m as reported) driven primarily by
increased performance based incentive costs and investment in brand
innovation.
|
|
-
|
2011 full year regional and central costs in the region
of $260m at constant currency.
|
|
|
|
|
Current trading update
|
•
|
July global RevPAR up 5.6%, including rate up 2.7%. RevPAR up 6.3% excluding Egypt, Bahrain and
Japan.
|
|
-
|
Americas 6.6%; (includes US 6.7%); EMEA 3.0%; Asia
Pacific 5.5%.
|
•
|
$14m operating profit benefit in the second half compared
to 2010 from one significant liquidated damages receipt, cessation of
depreciation on a hotel now held for sale and one favourable guarantee
settlement.
|
•
|
Operating profit impact from events in Middle East, Japan
and New Zealand of $7m in the first half with full year estimated
impact unchanged at $15m to $20m.
|
|
1All
figures are before exceptional items unless otherwise noted. See
appendix 3 and 4 for analysis of financial headlines
|
2CER
=constant exchange rates
|
³excluding
$10m of significant liquidated damages receipts in 2011
|
4After
exceptional items
|
5partly
intended to rebalance interim and final dividend payments
|
6see
appendix 6 for definition.
|
Regional Highlights
|
Americas – Holiday Inn brand family drives increase in
signings on 2010
|
RevPAR increased 7.6%, including rate growth of 2.1%. US
RevPAR was up 8.2%, including rate growth of 2.4%. Second quarter
RevPAR growth of 7.5%, with 2.6% rate growth and 8.1% in the US, with
2.8% rate growth.
Revenue increased 6% to $416m (5.3% at CER) and operating
profit increased 26% to $225m. After
adjusting for the owned hotel disposals and excluding the impact of a
$10m liquidated damages receipt and $5m benefit year on year from the
conclusion of a specific guarantee negotiation relating to one hotel,
revenue was up 8% and operating profit up 19%. This was driven by 10.2%
owned hotel RevPAR growth and a $19m increase in franchise royalty
fees, net of a $5m reduction in royalties due to a net system size
reduction primarily due to Holiday Inn exits.
We signed 11,614 rooms (102 hotels) in the half, up
almost 1,500 rooms on the same period in 2010, due to an additional 19
Holiday Inn brand family deals, demonstrating the continued wider
benefits of the relaunch. Four new Hotel Indigo deals were signed,
including one on the Lower East Side of Manhattan, taking our Hotel
Indigo pipeline in the Americas to 5,701 rooms (44 hotels). 16,520
rooms (88 hotels) were opened into the system (2010: 12,320 rooms),
including the 6,986 room Las Vegas Sands (LVS) Venetian and Palazzo
InterContinental Alliance Resorts.
|
|
|
|
|
|
|
EMEA – 14.4% owned RevPAR growth drives owned profits up
over 50%
|
RevPAR increased 4.0%, including rate growth of 2.0%. RevPAR grew 5.3% excluding Egypt (10
hotels) and Bahrain (2 hotels) where the political unrest resulted in
significant declines. In other Middle East markets RevPAR grew,
including 10.2% in Saudi Arabia and 3.4% in the United Arab Emirates.
Second quarter EMEA RevPAR growth of 4.8%, with rate growth of 2.1%.
6.0% second quarter RevPAR growth excluding Egypt and Bahrain.
Revenue increased 17% (10% at CER) to $224m and operating
profit increased 22% (12% at CER) to $71m. This was driven by 14.4%
owned RevPAR growth and a $6m increase in franchise royalties as a
result of 5.3% RevPAR growth and a 2% increase in year on year room
count. Managed operating profit declined by $1m to $31m as underlying
growth across Continental Europe was offset by a $4m impact from the
unrest in the Middle East.
We signed 4,547 rooms (24 hotels) in the half, up over
1,200 rooms on the first half of 2010. These included 7 Crowne Plaza
hotels, 3 Hotel Indigo hotels and 4 Staybridge Suites hotels. 3,461 rooms (19 hotels) were opened into the
system (2010: 2,938), including 2 Hotel Indigo hotels in the UK and 9
Crowne Plaza hotels across 8 different countries demonstrating the
strength of this brand across the region.
|
Asia Pacific – Strong RevPAR and rooms growth drives a
31% profit increase
|
RevPAR increased 7.0%, including rate growth of 3.7%.
Excluding Japan (32 hotels) where the earthquake and resultant events
negatively impacted growth, RevPAR grew 11.6%. Greater
China continues to be our strongest market with RevPAR up 12.7%,
including rate growth of 7.1%. Second
quarter Asia Pacific RevPAR growth of 4.4%, with 2.7% rate growth. 9.8%
second quarter RevPAR growth excluding Japan.
Revenue increased 14% (10% at CER) to $156m and operating
profit increased 31% to $46m, driven by strong RevPAR growth and a 5%
increase in year on year room count, led by Greater China, up 11%. Managed operating profit increased $9m to
$39m, despite the $3m impact from the natural disasters in Japan and
New Zealand.
We signed 4,978 rooms (22 hotels) in the half,
comprising: 9 hotels in Greater China; 4 hotels in India as part of the
deal with Duet Hotels India; 6 hotels in Indonesia and 3 hotels in
Thailand. On 8 August we announced the signing of a 1,224 room Holiday
Inn in Macau with Sands China Ltd. 4,538 rooms (15 hotels) were opened
into the system, including 3 hotels in India and 9 in Greater China
where we now have 154 hotels open and 142 in the pipeline.
|
Capital recycling strategy driving growth
|
In the first half we completed the disposal of Hotel
Indigo San Diego, Staybridge Suites Denver Cherry Creek, Holiday Inn
Atlanta-Gwinnett Place and agreed the sale of a hotel asset and
partnership interest in Australia. Proceeds from these sales will total
$143m, 36% above book value. We now own
just 12 hotels, including InterContinental New York Barclay which is on
the market.
In line with our strategy to recycle capital to drive
growth in our brands, during the half we committed to invest $72m in
growth capital expenditure, spending $45m in the first half. These multi-year investments comprise a $12m
equity stake in Summit Hotel Properties Inc. in the US with whom we
have a hotel sourcing agreement; a $30m joint
venture to take Holiday Inn Express into India; and a $30m joint
venture to develop a Hotel Indigo on the Lower East side of Manhattan.
|
Interest, tax, exceptional items, dividend and net debt
|
The interest charge for the period was $32m (H1 2010:
$31m). The tax charge has been calculated
using an estimated annual tax rate of 28% (H1 2010: 28%).
Exceptional operating charge includes $37m in relation to
the settlement of a commercial dispute in the EMEA region and a $22m
litigation provision in the Americas.
The 25% increase in the interim dividend to 16.0¢ reflects strong performance in the first half and the
intention to move towards rebalancing the interim and final payouts
towards approximately a 30:70 ratio.
Net debt was $818m at the end of the half (including the
$208m finance lease on the InterContinental Boston).
This is down from $1.0bn at 30 June 2010 but up $75m
on the year end 2010 position due to seasonal working capital movements
including incentive payments. This is expected to partly reverse for
the full year 2011.
|
Appendix 1: RevPAR Movement Summary
|
|
July
2011
|
Half
Year 2011
|
Q2
2011
|
|
RevPAR
|
Rate
|
Occ.
|
RevPAR
|
Rate
|
Occ.
|
RevPAR
|
Rate
|
Occ.
|
Group
|
5.6%
|
2.7%
|
2.0%pts
|
6.7%
|
2.1%
|
2.7%pts
|
6.5%
|
2.4%
|
2.6%pts
|
Americas
|
6.6%
|
3.5%
|
2.1%pts
|
7.6%
|
2.1%
|
3.3%pts
|
7.5%
|
2.6%
|
3.1%pts
|
EMEA
|
3.0%
|
1.1%
|
1.3%pts
|
4.0%
|
2.0%
|
1.3%pts
|
4.8%
|
2.1%
|
1.8%pts
|
Asia
Pacific
|
5.5%
|
2.1%
|
2.4%pts
|
7.0%
|
3.7%
|
2.0%pts
|
4.4%
|
2.7%
|
1.1%pts
|
Appendix 2: Half Year 2011 System & Pipeline Summary
(rooms)
|
|
System
|
Pipeline
|
Openings
|
Removals
|
Net
|
Total
|
YoY%
|
Signings
|
Total
|
Group
|
24,519
|
(15,006)
|
9,513
|
656,674
|
0%
|
21,139
|
186,116
|
Americas
|
16,520
|
(10,488)
|
6,032
|
445,407
|
(1)%
|
11,614
|
87,862
|
EMEA
|
3,461
|
(2,186)
|
1,275
|
122,127
|
1%
|
4,547
|
31,558
|
Asia
Pacific
|
4,538
|
(2,332)
|
2,206
|
89,140
|
5%
|
4,978
|
66,696
|
Appendix 3: Second quarter financial headlines
|
Three
months to 30 June 2011
Operating
Profit $m
|
Total
|
Americas
|
EMEA
|
Asia
Pacific
|
Central
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
Franchised
|
140
|
124
|
118
|
107
|
20
|
16
|
2
|
1
|
-
|
-
|
Managed
|
54
|
41
|
15
|
6
|
20
|
19
|
19
|
16
|
-
|
-
|
Owned
& leased
|
31
|
22
|
7
|
6
|
17
|
10
|
7
|
6
|
-
|
-
|
Regional
costs
|
(28)
|
(26)
|
(12)
|
(12)
|
(9)
|
(8)
|
(7)
|
(6)
|
-
|
-
|
Operating
profit pre central costs
|
197
|
161
|
128
|
107
|
48
|
37
|
21
|
17
|
-
|
-
|
Central
costs
|
(40)
|
(25)
|
-
|
-
|
-
|
-
|
-
|
-
|
(40)
|
(25)
|
Group
Operating profit
|
157
|
136
|
128
|
107
|
48
|
37
|
21
|
17
|
(40)
|
(25)
|
Appendix 4: First half financial headlines
|
Six
months to 30 June 2011
Operating
Profit $m
|
Total
|
Americas
|
EMEA
|
Asia
Pacific
|
Central
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
2011
|
2010
|
Franchised
|
248
|
219
|
209
|
188
|
35
|
28
|
4
|
3
|
-
|
-
|
Managed
|
103
|
75
|
33
|
13
|
31
|
32
|
39
|
30
|
-
|
-
|
Owned
& leased
|
47
|
33
|
6
|
4
|
23
|
15
|
18
|
14
|
-
|
-
|
Regional
costs
|
(56)
|
(55)
|
(23)
|
(26)
|
(18)
|
(17)
|
(15)
|
(12)
|
-
|
-
|
Operating
profit pre central costs
|
342
|
272
|
225
|
179
|
71
|
58
|
46
|
35
|
-
|
-
|
Central
costs
|
(73)
|
(53)
|
-
|
-
|
-
|
-
|
-
|
-
|
(73)
|
(53)
|
Group
Operating profit
|
269
|
219
|
225
|
179
|
71
|
58
|
46
|
35
|
(73)
|
(53)
|
Appendix 5: Constant exchange rate (CER) operating profit
movement before exceptional items
|
|
Total***
|
Americas
|
EMEA
|
Asia
Pacific
|
Actual
currency*
|
CER**
|
Actual
currency*
|
CER**
|
Actual
currency*
|
CER**
|
Actual
currency*
|
CER**
|
Growth/
(decline)
|
23%
|
21%
|
26%
|
26%
|
22%
|
12%
|
31%
|
31%
|
Exchange
rates:
|
|
GBP:USD
|
EUR:USD
|
*
US dollar actual currency
|
2011
|
0.62
|
0.71
|
**
Translated at constant 2010 exchange rates
|
2010
|
0.66
|
0.75
|
***
After central overheads
|
|
|
|
|
|
|
|
|
|
|
|
|
Appendix 6: Definitions
|
Total
gross revenue:
total room revenue from franchised hotels and total hotel revenue from
managed, owned and leased hotels. It is not revenue attributable to
IHG, as it is derived mainly from hotels owned by third parties. The
metric is highlighted as an indicator of the scale and reach of IHG’s
brands.
Fee
based margins:
adjusted for owned and leased hotels, managed leases and one
individually significant liquidated damages receipt in 2011.
|
Appendix 7: Investor Information for 2011 Interim Dividend
|
Ex-dividend
date:
|
24
August 2011
|
Record
date:
|
26
August 2011
|
Payment
date:
|
7
October 2011
|
Dividend
payment:
|
Ordinary
shares = 9.8 pence per share
|
|
|
ADRs
= 16.0 cents per ADR
|
For further information, please contact:
|
Investor
Relations (Heather Wood; Catherine Dolton):
|
+44 (0)1895 512176
|
|
Media Affairs (Leslie McGibbon, Kari Kerr):
|
+44 (0)1895 512425
|
+44 (0) 7770 736 849
|
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 Richard Solomons (Chief Executive)
will commence at 9.30am (London time) on 9th August at Bank
of America 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/interims11. 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)20 7136 2054
|
Passcode:
|
9495779
|
US conference call and Q&A:
There will also be a conference call, primarily for US
investors and analysts, at 10.00am (Eastern Standard Time) on 9th
August with Richard Solomons (Chief Executive). There
will be an opportunity to ask questions.
|
International dial-in:
|
+44 (0)20 7108 6370
|
Standard US dial-in:
|
+1 517 345 9004
|
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 2341.
|
International dial-in:
|
+1 203 369 4810
|
US Toll Free:
|
+1 877 267 9692
|
Website:
The full release and supplementary data will be available
on our website from 7.00 am (London time) on 9 August. The web address
is www.ihg.com/interims11. To watch a video of Richard Solomons reviewing our results visit
our YouTube channel at www.youtube.com/ihgplc.
|
Notes to Editors:
IHG (InterContinental Hotels Group) [LON:IHG, NYSE:IHG
(ADRs)] is a global company operating seven well-known 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® . IHG also manages Priority Club®
Rewards, the world’s first and largest hotel loyalty programme with
almost 60 million members worldwide.
IHG is the world’s largest hotel group by number of rooms
and IHG franchises, leases, manages or owns, through various
subsidiaries, a portfolio of over 4,400 hotels and more than 656,000
guest rooms in 100 countries and territories around the world
IHG has more than 1,100 hotels in its development
pipeline and expects to recruit around 160,000 people 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 http://www.ihg.com and information for the Priority Club Rewards programme
at www.priorityclub.com .For our latest news visit www.ihg.com/media, Twitter www.twitter.com/ihgplc or YouTube http://www.youtube.com/ihgplc
|
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 REPORT
This
Interim
Management Report discusses the performance of InterContinental Hotels
Group
(the Group or IHG) for the six months ended 30 June 2011.
GROUP PERFORMANCE
|
3
months ended
|
6
months ended
|
|
30
June
2011
|
30 June
2010
|
%
|
30
June
2011
|
30 June
2010
|
%
|
Group Results
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Americas
|
222
|
215
|
3.3
|
416
|
393
|
5.9
|
|
EMEA
|
129
|
102
|
26.5
|
224
|
192
|
16.7
|
|
Asia Pacific
|
76
|
68
|
11.8
|
156
|
137
|
13.9
|
|
Central
|
27
|
25
|
8.0
|
54
|
50
|
8.0
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
454
|
410
|
10.7
|
850
|
772
|
10.1
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Operating profit before
exceptional items
|
|
|
|
|
|
|
|
Americas
|
128
|
107
|
19.6
|
225
|
179
|
25.7
|
|
EMEA
|
48
|
37
|
29.7
|
71
|
58
|
22.4
|
|
Asia Pacific
|
21
|
17
|
23.5
|
46
|
35
|
31.4
|
|
Central
|
(40)
|
(25)
|
(60.0)
|
(73)
|
(53)
|
(37.7)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
157
|
136
|
15.4
|
269
|
219
|
22.8
|
|
|
|
|
|
|
|
Exceptional operating items
|
(30)
|
6
|
n/m
|
(32)
|
4
|
n/m
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
127
|
142
|
(10.6)
|
237
|
223
|
6.3
|
Net financial expenses
|
(16)
|
(16)
|
-
|
(32)
|
(31)
|
(3.2)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Profit before tax
|
111
|
126
|
(11.9)
|
205
|
192
|
6.8
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
|
|
|
|
|
Total Earnings per ordinary share
|
|
|
|
|
|
|
|
Basic
|
30.0¢
|
30.2¢
|
(0.7)
|
54.0¢
|
49.1¢
|
10.0
|
|
Adjusted
|
35.2¢
|
29.5¢
|
19.3
|
59.2¢
|
47.0¢
|
26.0
|
n/m
– non
meaningful
Revenue
increased
by 10.1% in the period to $850m, driven by an increase in RevPAR of
6.7% with
system size broadly flat on the same period in 2010.
Operating profit before exceptional items
increased by 22.8% to $269m during the six months ended 30 June 2011. Applying 2010 exchange rates, revenue and
operating profit before exceptional items increased by 7.5% and 21.5%
respectively.
Underlying fee based margin has increased by 0.9 percentage points to
40.6%, driven by strong RevPAR growth, scale and efficiencies.
[1]
Operating
profit for
the first quarter of 2011 benefited from an individually significant
receipt of
liquidated damages in the Americas region amounting to $10m. Operating profit in the Americas in the second
quarter also included a $5m benefit against the same period in the
prior year
on the conclusion of a specific guarantee payment negotiation in
relation to a
different hotel; the full year benefit against 2010 will be $10m. There is no further guarantee exposure on this
hotel.
Natural
disasters
in Japan and New Zealand, as well as political unrest in the Middle
East have
had an adverse impact on the results for the period estimated at $7m. The current expected full year impact from
these events is between $15m and $20m.
Group
RevPAR
increased by 6.7% against the six months ended 30 June 2010, and by
6.5% in the
second quarter against the same period in the prior year.
Whilst RevPAR growth continued to be led by
strengthening occupancy, daily room rates increased across all brands. Group RevPAR growth excluding the impact of
natural disasters in the Asia Pacific region and political unrest in
the Middle
East was 7.6%.
Central
and
regional costs increased by $21m to $129m in the six months ($16m on a
constant
currency basis). This increase was as a
result of higher investment in brand innovation as well as higher
performance
based incentive costs in the first half of 2011 as compared to 2010. Full year central and regional costs on a
constant currency basis are expected to be in the region of $260m,
compared to
$258m in 2010.
Profit
before tax
increased by $13m from $192m to $205m. Adjusted earnings per ordinary
share
increased by 26.0% to 59.2¢.
The
IHG global
system (the number of hotels which are franchised, managed, owned or
leased)
increased in the first half of 2011 by 25 hotels (9,513 rooms) with
openings of
122 hotels (24,519 rooms) and removals of 97 hotels (15,006 rooms) as a
result
of the continuing reinvigoration and global relaunch of the Holiday Inn
brand. The
InterContinental Alliance relationship with the Las Vegas Sands Corp.
contributed to these openings through 6,986 all-suite rooms at the
Venetian and
Palazzo Resorts in March of 2011.
At
30 June 2011,
the IHG pipeline which represents hotels and rooms where a contract has
been
signed and the appropriate fees paid, totalled 1,190 hotels (186,116
rooms), a
decline of 85 hotels (18,743 rooms) since the year end.
The movement included additions to the pipeline
totalling 148 hotels (21,139 rooms), which were above additions in the
same
period of 2010 by 18 hotels (2,013 rooms). Additions
were offset by openings and pipeline
terminations which occur
for a number of reasons such as withdrawal of financing and changes in
local
market conditions.
THE AMERICAS
|
3
months ended
|
6
months ended
|
|
30
June
2011
|
30 June
2010
|
%
|
30
June
2011
|
30 June
2010
|
%
|
Americas Results
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Franchised
|
135
|
123
|
9.8
|
244
|
221
|
10.4
|
|
Managed
|
32
|
30
|
6.7
|
70
|
59
|
18.6
|
|
Owned and leased
|
55
|
62
|
(11.3)
|
102
|
113
|
(9.7)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
222
|
215
|
3.3
|
416
|
393
|
5.9
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Operating profit before
exceptional
items
|
|
|
|
|
|
|
Franchised
|
118
|
107
|
10.3
|
209
|
188
|
11.2
|
|
Managed
|
15
|
6
|
150.0
|
33
|
13
|
153.8
|
|
Owned and leased
|
7
|
6
|
16.7
|
6
|
4
|
50.0
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
140
|
119
|
17.6
|
248
|
205
|
21.0
|
Regional overheads
|
(12)
|
(12)
|
-
|
(23)
|
(26)
|
11.5
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
128
|
107
|
19.6
|
225
|
179
|
25.7
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Revenue
and
operating profit before exceptional items increased by $23m to $416m
(5.9%) and
$46m to $225m (25.7%) respectively during the six months ended 30 June
2011.
During
the period,
three owned and leased hotels, the Holiday Inn Atlanta Gwinnett Place,
the
Staybridge Suites Denver Cherry Creek and the Hotel Indigo San Diego
were
sold. The Holiday Inn Atlanta Gwinnett
Place was retained on a managed basis and the Staybridge Suites Denver
Cherry
Creek was retained on a franchise basis, both as part of a new
strategic
relationship with a US hotel real estate investment trust, in which IHG
also
purchased a 4.7% stake. The Hotel Indigo
San Diego was retained on a managed basis. In
the prior year, the InterContinental Buckhead, Atlanta
was sold on 1
July 2010 and the Holiday Inn Lexington on 25 March 2010.
The
Group has
commenced marketing for sale the InterContinental New York Barclay. As such this property has been classified as
held for sale during the period. Depreciation
was charged on this property in the first
quarter prior to
its classification as held for sale, subsequent to which no
depreciation charge
was booked.
Americas
revenue
and operating profit increased by $31m (8.4%) and $34m (19.3%) after
adjusting
for owned and leased disposals and excluding the impact of an
individually
significant liquidated damages receipt of $10m and a $5m benefit from
the
conclusion of a specific guarantee negotiation relating to a different
hotel. RevPAR in the first half of the
year increased by 7.6% and system size was broadly flat on the same
period of
2010.
During
the first
half of 2011, franchised revenue and operating profit increased by $23m
to $244m
(10.4%) and $21m to $209m (11.2%) respectively, compared to the same
period in 2010. This increase was
predominantly in relation
to royalties, driven by growth in RevPAR on the prior year of 7.3%. Increased fees associated with initial
franchising, relicensing and termination of hotels leaving the system
contributed a further $3m to the variance on 2010.
Managed
revenue
increased by $11m to $70m (18.6%) and operating profit increased by
$20m to
$33m (153.8%). This increase in revenue
was driven by RevPAR growth across the American managed estate of 9.5%
on the
same period in the prior year, with an increase of 2% in system size. Excluding the impact of an individually
significant liquidated damages receipt of $10m and a $5m benefit from
the
conclusion of a specific guarantee negotiation relating to a different
hotel,
revenue and operating profit increased by $1m (1.7%) and $5m (38.5%)
respectively. Additional non-trading
events, including bad debt receipts, also had a favourable impact on
profit of
approximately $3m.
The
managed
results include $36m (2010: $36m) of revenue and $2m (2010: $1m) of
operating
profit from properties that are structured for legal reasons as
operating
leases but with the same characteristics as management contracts.
Owned
and leased
revenue excluding the impact of disposals increased by $7m (8.2%) and
operating
profit excluding the impact of disposals and depreciation charged on
held for
sale assets increased by $3m to $7m, with growth primarily driven by an
increase in RevPAR of 10.2%.
|
Hotels
|
Rooms
|
|
|
Change over
|
|
Change over
|
Americas hotel and room count
|
2011
30
June
|
2010
31 December
|
2011
30
June
|
2010
31 December
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
56
|
-
|
19,094
|
(26)
|
|
Crowne Plaza
|
202
|
(7)
|
54,680
|
(2,393)
|
|
Holiday Inn
|
808
|
(4)
|
143,315
|
(1,368)
|
|
Holiday Inn Express
|
1,856
|
9
|
161,313
|
1,446
|
|
Staybridge Suites
|
188
|
5
|
20,550
|
536
|
|
Candlewood Suites
|
297
|
9
|
29,077
|
824
|
|
Hotel Indigo
|
33
|
(2)
|
3,973
|
(281)
|
|
Holiday Inn Club Vacations
|
6
|
-
|
2,892
|
-
|
|
Other
|
25
|
3
|
10,513
|
7,294
|
|
____
|
____
|
______
|
_____
|
Total
|
3,471
|
13
|
445,407
|
6,032
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
3,244
|
14
|
398,730
|
6,194
|
|
Managed
|
221
|
2
|
44,166
|
318
|
|
Owned and leased
|
6
|
(3)
|
2,511
|
(480)
|
|
____
|
____
|
______
|
_____
|
Total
|
3,471
|
13
|
445,407
|
6,032
|
|
____
|
____
|
______
|
_____
|
The
Americas
system size increased in the first half of 2011 by 13 hotels (6,032
rooms),
with 88 hotels (16,520 rooms) joining the system including the two
InterContinental Alliance Resorts (6,986 rooms). Holiday
Inn and Holiday Inn Express
contributed 69 hotels (7,545 rooms) to the openings in the period with
Staybridge
Suites and Candlewood Suites contributing 14 hotels (1,326 rooms).
75
hotels (10,448
rooms) left the system in the period, primarily across the Holiday Inn
and
Holiday Inn Express brands (64 hotels, 7,467 rooms).
|
Hotels
|
Rooms
|
|
|
Change over
|
|
Change over
|
Americas pipeline
|
2011
30
June
|
2010
31 December
|
2011
30
June
|
2010
31 December
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
5
|
-
|
1,340
|
-
|
|
Crowne Plaza
|
24
|
(3)
|
4,922
|
(747)
|
|
Holiday Inn
|
170
|
(17)
|
23,008
|
(2,252)
|
|
Holiday Inn Express
|
383
|
(24)
|
35,065
|
(1,946)
|
|
Staybridge Suites
|
84
|
(12)
|
8,673
|
(1,443)
|
|
Candlewood Suites
|
105
|
(15)
|
9,153
|
(1,353)
|
|
Hotel Indigo
|
44
|
(2)
|
5,701
|
(32)
|
|
Other brands
|
-
|
(2)
|
-
|
(6,874)
|
|
____
|
____
|
______
|
_____
|
Total
|
815
|
(75)
|
87,862
|
(14,647)
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
803
|
(75)
|
85,280
|
(14,792)
|
|
Managed
|
12
|
-
|
2,582
|
145
|
|
____
|
____
|
______
|
_____
|
Total
|
815
|
(75)
|
87,862
|
(14,647)
|
|
____
|
____
|
______
|
_____
|
The
Americas
pipeline at 30 June 2011 totalled 815 hotels (87,862 rooms)
representing a
decline of 75 hotels (14,647 rooms) over 31 December 2010.
Openings in the period from hotels in the
pipeline at 31 December 2010 included the two InterContinental Alliance
Resorts.
New
signings in
the period of 102 hotels (11,614 rooms) were ahead of the same period
last year
by 16 hotels (1,490 rooms, 14.7%). Significant
signings in the period included the Hotel
Indigo Lower East
Side, New York, which contributed 290 rooms. Terminations
from the pipeline of 9,741 rooms were down on
the prior year
by 1,223 rooms (11.2%).
Europe,
Middle East and
Africa (EMEA)
|
3
months ended
|
6
months ended
|
|
30
June
2011
|
30 June
2010
|
%
|
30
June
2011
|
30 June
2010
|
%
|
EMEA Results
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Franchised
|
25
|
20
|
25.0
|
45
|
37
|
21.6
|
|
Managed
|
40
|
32
|
25.0
|
69
|
61
|
13.1
|
|
Owned and leased
|
64
|
50
|
28.0
|
110
|
94
|
17.0
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
129
|
102
|
26.5
|
224
|
192
|
16.7
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Operating profit before
exceptional items
|
|
|
|
|
|
|
Franchised
|
20
|
16
|
25.0
|
35
|
28
|
25.0
|
|
Managed
|
20
|
19
|
5.3
|
31
|
32
|
(3.1)
|
|
Owned and leased
|
17
|
10
|
70.0
|
23
|
15
|
53.3
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
57
|
45
|
26.7
|
89
|
75
|
18.7
|
Regional overheads
|
(9)
|
(8)
|
(12.5)
|
(18)
|
(17)
|
(5.9)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
48
|
37
|
29.7
|
71
|
58
|
22.4
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
|
|
|
|
|
Revenue
increased
by $32m to $224m (16.7%) and operating profit before exceptional items
increased by $13m to $71m (22.4%) during the six months ended 30 June
2011. At constant exchange rates,
revenue and operating profit before exceptional items increased by 9.9%
and
12.1% respectively.
RevPAR
growth
across the region was 4.0% in the six months to 30 June 2011 compared
to the
same period in the prior year, including a 4.8% increase in the second
quarter
compared to the same period in 2010. RevPAR
growth for the region excluding the countries
impacted by
political unrest was 5.3%. System size
across the region grew by 941 rooms (0.8%) on that at 30 June 2010.
Franchised
revenue
and operating profit increased by $8m to $45m (21.6%) and by $7m to
$35m
(25.0%) respectively. On a constant
currency basis, revenue and operating profit increased by $4m (10.8%)
and $4m
(14.3%) respectively primarily driven by a RevPAR increase of 5.3%. System size in the franchised business grew
by 2.4% on the same period in 2010.
Managed
revenue
increased by $8m to $69m (13.1%), whilst operating profit decreased by
$1m to
$31m (3.1%). On a constant currency
basis, excluding the areas impacted by political unrest in the Middle
East,
revenue was unchanged on the same period last year whilst operating
profit grew
by $1m (6.3%).
In
the owned and
leased estate RevPAR increased by 14.4%, driving a revenue increase of
$16m to
$110m (17.0%). Operating profit
increased by $8m to $23m (53.3%). On a
constant currency basis, revenue and operating profit grew by $10m
(10.6%) and
$6m (40%) respectively. Increases were
driven, in particular, by strong daily room rate growth from the
InterContinental London Park Lane and the InterContinental Paris Le
Grand.
|
Hotels
|
Rooms
|
|
|
Change over
|
|
Change over
|
EMEA
hotel and room count
|
2011
30
June
|
2010
31 December
|
2011
30
June
|
2010
31 December
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
61
|
(3)
|
19,360
|
(751)
|
|
Crowne Plaza
|
106
|
8
|
24,978
|
2,037
|
|
Holiday Inn
|
321
|
(4)
|
52,059
|
(886)
|
|
Holiday Inn Express
|
202
|
4
|
24,337
|
631
|
|
Staybridge Suites
|
5
|
-
|
747
|
(1)
|
|
Hotel Indigo
|
4
|
2
|
355
|
245
|
|
Other
|
2
|
-
|
291
|
-
|
|
____
|
____
|
______
|
_____
|
Total
|
701
|
7
|
122,127
|
1,275
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
533
|
10
|
81,696
|
1,746
|
|
Managed
|
164
|
(3)
|
38,985
|
(471)
|
|
Owned and leased
|
4
|
-
|
1,446
|
-
|
|
____
|
____
|
______
|
_____
|
Total
|
701
|
7
|
122,127
|
1,275
|
|
____
|
____
|
______
|
_____
|
During
the first
half of 2011, EMEA system size increased by seven hotels (1,275 rooms),
including
the removal of 12 hotels (2,186 rooms) offset by 19 hotel openings
(3,461
rooms). The removal of eight Holiday Inn
and Holiday Inn Express hotels (1,347 rooms) was driven by the
completion of
the reinvigoration and global relaunch of the Holiday Inn brand.
|
Hotels
|
Rooms
|
|
|
Change over
|
|
Change over
|
EMEA pipeline
|
2011
30
June
|
2010
31 December
|
2011
30
June
|
2010
31 December
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
25
|
1
|
6,714
|
245
|
|
Crowne Plaza
|
23
|
(2)
|
6,845
|
(754)
|
|
Holiday Inn
|
42
|
1
|
9,621
|
493
|
|
Holiday Inn Express
|
43
|
(4)
|
6,106
|
(417)
|
|
Staybridge Suites
|
9
|
4
|
1,131
|
487
|
|
Hotel Indigo
|
10
|
(1)
|
1,141
|
69
|
|
____
|
____
|
______
|
_____
|
Total
|
152
|
(1)
|
31,558
|
123
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type
|
|
|
|
|
|
Franchised
|
84
|
(6)
|
12,719
|
(823)
|
|
Managed
|
68
|
5
|
18,839
|
946
|
|
____
|
____
|
______
|
_____
|
Total
|
152
|
(1)
|
31,558
|
123
|
|
____
|
____
|
______
|
_____
|
The
EMEA pipeline
at 30 June 2011 totalled 152 hotels (31,558 rooms) representing a
decrease of
one hotel but an increase of 123 rooms over the pipeline at 31 December
2010. A total of 24 hotels (4,547 rooms)
were added
to the region’s pipeline during the first six months of 2011. New signings were focussed on the Crowne
Plaza (1,480 rooms) and Holiday Inn (1,220 rooms) brands which together
accounted for 59% of additions to the pipeline.
Asia
Pacific
|
3
months ended
|
6
months ended
|
|
30
June
2011
|
30 June
2010
|
%
|
30
June
2011
|
30 June
2010
|
%
|
Asia Pacific Results
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
Franchised
|
3
|
3
|
-
|
6
|
6
|
-
|
|
Managed
|
39
|
35
|
11.4
|
79
|
68
|
16.2
|
|
Owned and leased
|
34
|
30
|
13.3
|
71
|
63
|
12.7
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
76
|
68
|
11.8
|
156
|
137
|
13.9
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Operating profit before
exceptional items
|
|
|
|
|
|
|
Franchised
|
2
|
1
|
100.0
|
4
|
3
|
33.3
|
|
Managed
|
19
|
16
|
18.8
|
39
|
30
|
30.0
|
|
Owned and leased
|
7
|
6
|
16.7
|
18
|
14
|
28.6
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
28
|
23
|
21.7
|
61
|
47
|
29.8
|
Regional overheads
|
(7)
|
(6)
|
(16.7)
|
(15)
|
(12)
|
(25.0)
|
|
____
|
____
|
____
|
____
|
____
|
____
|
Total
|
21
|
17
|
23.5
|
46
|
35
|
31.4
|
|
____
|
____
|
____
|
____
|
____
|
____
|
|
|
|
|
|
|
|
Revenue
increased
by $19m to $156m (13.9%) and operating profit before exceptional items
increased by $11m to $46m (31.4%). At constant exchange rates, revenue
and
operating profit before exceptional items increased by $14m (10.2%) and
$11m
(31.4%) respectively.
RevPAR
increased
by 7.0% compared to the first half of 2010, as the impact of natural
disasters
in New Zealand and Japan was offset by RevPAR growth of 12.7% in
Greater
China. Excluding areas impacted by
natural disasters, RevPAR across the Asia Pacific region increased by
11.6%. System size for the region
increased by 5.0%
compared to that at 30 June 2010.
Franchised
revenue
remained flat at $6m and operating profit increased by $1m to $4m
(33.3%).
Managed
revenue
increased by $11m to $79m (16.2%) and managed operating profit
increased by $9m
to $39m (30.0%). Managed RevPAR
increased by 7.4%, compared to the first half of 2010 and system size
increased
by 5.2% on that at 30 June 2010. Despite
the impact of the Shanghai Expo which drove exceptional RevPAR growth
of 31.2%
in the first half of 2010, managed RevPAR in Greater China continued to
show
strong growth through the first half of 2011 at 12.0%.
In
the owned and
leased estate, revenue and operating profit increased by $8m to $71m
(12.7%)
and by $4m to $18m (28.6%) respectively reflecting a RevPAR increase of
18.1%
at the InterContinental Hong Kong.
|
Hotels
|
Rooms
|
|
|
Change over
|
|
Change over
|
Asia Pacific hotel and room count
|
2011
30
June
|
2010
31 December
|
2011
30
June
|
2010
31 December
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
53
|
2
|
20,103
|
905
|
|
Crowne Plaza
|
86
|
5
|
27,827
|
1,686
|
|
Holiday Inn
|
104
|
-
|
29,544
|
(53)
|
|
Holiday Inn Express
|
30
|
-
|
7,828
|
173
|
|
Hotel Indigo
|
1
|
-
|
184
|
-
|
|
Other
|
16
|
(2)
|
3,654
|
(505)
|
|
____
|
____
|
______
|
_____
|
Total
|
290
|
5
|
89,140
|
2,206
|
|
____
|
____
|
______
|
_____
|
Analysed by ownership type:
|
|
|
|
|
|
Franchised
|
30
|
-
|
7,646
|
812
|
|
Managed
|
258
|
5
|
80,799
|
1,392
|
|
Owned and leased
|
2
|
-
|
695
|
2
|
|
____
|
____
|
______
|
_____
|
Total
|
290
|
5
|
89,140
|
2,206
|
|
____
|
____
|
______
|
_____
|
Asia
Pacific
system size increased by five hotels (2,206 rooms) to 290 hotels
(89,140 rooms)
in the first half of 2011. Removals of
10 hotels (2,332 rooms) were offset by openings of 15 hotels (4,538
rooms). Openings included nine hotels
(2,902 rooms) in Greater China.
|
Hotels
|
Rooms
|
|
|
Change over
|
|
Change over
|
Asia Pacific
pipeline
|
2011
30
June
|
2010
31 December
|
2011
30
June
|
2010
31 December
|
Analysed by brand
|
|
|
|
|
|
InterContinental
|
29
|
(2)
|
10,548
|
(1,017)
|
|
Crowne Plaza
|
68
|
(3)
|
24,446
|
(1,280)
|
|
Holiday Inn
|
73
|
(12)
|
20,051
|
(3,066)
|
|
Holiday Inn Express
|
47
|
7
|
10,701
|
1,016
|
|
Hotel Indigo
|
6
|
1
|
950
|
128
|
|
____
|
____
|
______
|
_____
|
Total
|
223
|
(9)
|
66,696
|
(4,219)
|
|
____
|
____
|
______
|
_____
|
Analysed by
ownership type
|
|
|
|
|
|
Franchised
|
2
|
-
|
326
|
-
|
|
Managed
|
221
|
(9)
|
66,370
|
(4,219)
|
|
____
|
____
|
______
|
_____
|
Total
|
223
|
(9)
|
66,696
|
(4,219)
|
|
____
|
____
|
______
|
_____
|
The
pipeline in
Asia Pacific decreased over the period by nine hotels (4,219 rooms) to
223
hotels (66,696 rooms). This movement included signings of 22 hotels
(4,978
rooms), including nine hotels (2,705 rooms) in Greater China, with
seven of
these hotels (2,272 rooms) in the luxury and upscale brands
(InterContinental,
Crowne Plaza and Hotel Indigo). Key
signings included 1,773 rooms as a result of a new agreement in China
and 572
rooms as part of our new joint venture in India.
Central
Net central
costs increased
by
$20m to $73m (37.7%) during the six months ended 30 June 2011, $17m
(32.1%) on
a constant currency basis. The increase
was driven by higher performance based incentive costs in the first
half of 2011
compared to 2010, as well as higher investment in brand innovation.
System
Funds
In
the six months
ended 30 June 2011, System Fund income increased by $38m to $541m due
to the
growth in RevPAR and system size.
OTHER FINANCIAL INFORMATION
Exceptional Operating Items
- Exceptional
operating items of $32m in the six months ended 30 June 2011, included:
- a $22m estimate to cover an amount potentially payable in
respect of a prior year claim following an unfavourable court judgement
in the Americas on 23 February 2011;
- $37m relating to the settlement of a prior period
commercial dispute in EMEA;
- $3m impairment charge relating to available-for-sale equity
investments;
- $12m credit relating mainly to the reversal of previously
recorded impairment recorded on a North American hotel sold in the
quarter;
- $9m UK VAT refund; and
- $9m gain on disposal of hotels.
Net Financial Expenses
Net
financial
expenses increased by $1m to $32m for the six months ended 30 June 2011.
Taxation
The
tax charge on
profit before tax, excluding the impact of exceptional items, has been
calculated using an estimated effective annual tax rate of 28%. By also excluding the effect of prior year
items, the equivalent effective tax rate would be approximately 35%.
This rate
is higher than the average UK statutory rate for the year of 26.5% 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 $17m. This
represented, primarily, tax relief on exceptional
costs together
with tax arising on the disposal of hotels and a release of exceptional
taxes
booked in a prior year.
Net
tax paid in the
six months ended 30 June 2011 totalled $51m.
Dividends
Following
the
strong performance of the business last year, the Board rebased the
dividend
and paid a 2010 final dividend of 35.2¢, up 21%, taking total 2010
dividend
growth to 16%. Reflecting the strong performance of the business in the
first
half of 2011 and the intention to move towards rebalancing the interim
and
final dividend payouts towards approximately a 30:70 ratio, the Board
has
proposed a 2011 interim dividend per share of 16.0¢ (9.8p),
representing growth
of 25% on the 2010 interim dividend.
Capital Structure and Liquidity Management
During
the six
months ended 30 June 2011, $113m of cash was generated from operating
activities with the other key elements of the cash flow being:
- proceeds from the disposal of hotels and investments of
$76m, including $17m from the disposal of the
Holiday Inn Atlanta Gwinnett Place and the Staybridge Suites Denver
Cherry Creek to Summit Hotel Properties on 27 April 2011 and $56m from
the sale of Hotel Indigo San Diego to Chesapeake Lodging Trust on 17
June 2011. IHG continues to manage the
Holiday Inn Gwinnett and the Hotel Indigo San Diego and operates the
Staybridge Cherry Creek under a license agreement; and
- capital expenditure of $82m including a $12m equity stake
in Summit Hotel Properties Inc. in the US, $24m of a total $30m
investment in a joint venture to develop a Hotel Indigo on the Lower
East side of Manhattan and $8m of a total $30m investment in a joint
venture to develop Holiday Inn Express hotels in India.
Net
debt at 30
June 2011 of $818m comprised cash and cash equivalents of $55m, loans
and other
borrowings of $858m and the exchange element of the fair value of
currency
swaps of $15m that fix the value of the Group’s £250m 6% bonds at
$415m.
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 34 to 36 of the IHG Annual Report and Financial Statements
2010.
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 franchise and management agreements;
|
|
political and economic
developments;
|
|
requiring the right people,
skills and capability to manage growth and change;
|
|
events that adversely impact
domestic or international travel;
|
|
the reliance upon its
proprietary reservations system and is exposed to the risk of failures
in the system and increased competition in reservations infrastructure;
|
|
technology and systems;
|
|
the hotel industry supply and
demand cycle;
|
|
a lack of selected development
opportunities;
|
|
corporate responsibility;
|
|
litigation;
|
|
difficulties insuring the
business;
|
|
its financial stability, 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 wider economic environment remains
uncertain however we continue to see good growth in all our
regions.
Trading strengthened further during the first half of the year driven
by
increased occupancy from business and leisure travellers and
progressive rate
improvement. RevPAR is also benefiting from low supply
growth. Booking windows do, however, remain short and
visibility
limited.
The financing environment remains tough,
however IHG continues to open and sign high quality
hotels. Following
the Holiday Inn relaunch the hotels operating under the new brand
standards are
outperforming their closest competitors.
Our priorities to develop our brands and
invest behind growth and people mean we are well placed to increase
share and
improve margins in the currently favourable trading
environment. Our global scale, powerful
brands, revenue
delivery systems, resilient cash generative business model and focus on
efficiency combined with an optimistic market outlook give us
confidence in the
future.
A copy of the IHG Annual Report and
Financial Statements 2010 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
related party transactions and changes therein, as required by DTR
4.2.8R.
On behalf of the Board
Richard
Solomons
Chief Executive Officer
8 August 2011
InterContinental
Hotels Group
PLC
GROUP
INCOME STATEMENT
For the three months ended 30 June 2011
|
3
months ended 30 June 2011
|
3
months ended 30 June 2010
|
|
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)
|
454
|
-
|
454
|
410
|
-
|
410
|
Cost of sales
|
(188)
|
-
|
(188)
|
(182)
|
-
|
(182)
|
Administrative expenses
|
(88)
|
(37)
|
(125)
|
(68)
|
(2)
|
(70)
|
Other operating income and expenses
|
4
|
9
|
13
|
3
|
8
|
11
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
182
|
(28)
|
154
|
163
|
6
|
169
|
|
|
|
|
|
|
|
Depreciation and amortisation
|
(25)
|
-
|
(25)
|
(27)
|
-
|
(27)
|
Impairment
|
-
|
(2)
|
(2)
|
-
|
-
|
-
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
|
|
|
|
|
|
Operating profit (note 3)
|
157
|
(30)
|
127
|
136
|
6
|
142
|
Financial income
|
1
|
-
|
1
|
-
|
-
|
-
|
Financial expenses
|
(17)
|
-
|
(17)
|
(16)
|
-
|
(16)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
|
|
|
|
|
|
Profit before tax (note 3)
|
141
|
(30)
|
111
|
120
|
6
|
126
|
|
|
|
|
|
|
|
Tax (note 5)
|
(39)
|
15
|
(24)
|
(35)
|
(4)
|
(39)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
Profit for the period from
continuing operations attributable to the equity holders of the parent
|
102
|
(15)
|
87
|
85
|
2
|
87
|
|
====
|
====
|
====
|
====
|
====
|
====
|
|
|
|
|
|
|
|
Earnings per ordinary share
(note 6)
|
|
|
|
|
|
|
Continuing and total operations:
|
|
|
|
|
|
|
|
Basic
|
|
|
30.0¢
|
|
|
30.2¢
|
|
Diluted
|
|
|
29.5¢
|
|
|
29.3¢
|
|
Adjusted
|
35.2¢
|
|
|
29.5¢
|
|
|
|
Adjusted diluted
|
34.6¢
|
|
|
28.6¢
|
|
|
|
====
|
|
====
|
====
|
|
====
|
InterContinental
Hotels Group
PLC
GROUP
INCOME STATEMENT
For the six months ended 30 June 2011
|
6
months ended 30 June 2011
|
6
months ended 30 June 2010
|
|
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)
|
850
|
-
|
850
|
772
|
-
|
772
|
Cost of sales
|
(369)
|
-
|
(369)
|
(360)
|
-
|
(360)
|
Administrative expenses
|
(169)
|
(59)
|
(228)
|
(142)
|
(3)
|
(145)
|
Other operating income and expenses
|
8
|
18
|
26
|
4
|
8
|
12
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
320
|
(41)
|
279
|
274
|
5
|
279
|
|
|
|
|
|
|
|
Depreciation and amortisation
|
(51)
|
-
|
(51)
|
(55)
|
-
|
(55)
|
Impairment
|
-
|
9
|
9
|
-
|
(1)
|
(1)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
|
|
|
|
|
|
Operating profit (note 3)
|
269
|
(32)
|
237
|
219
|
4
|
223
|
Financial income
|
1
|
-
|
1
|
1
|
-
|
1
|
Financial expenses
|
(33)
|
-
|
(33)
|
(32)
|
-
|
(32)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
|
|
|
|
|
|
|
Profit before tax (note 3)
|
237
|
(32)
|
205
|
188
|
4
|
192
|
|
|
|
|
|
|
|
Tax (note 5)
|
(66)
|
17
|
(49)
|
(53)
|
-
|
(53)
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
Profit for the period from
continuing operations
|
171
|
(15)
|
156
|
135
|
4
|
139
|
|
|
|
|
|
|
|
Profit for the period from discontinued operations
|
-
|
-
|
-
|
-
|
2
|
2
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
Profit for the period
attributable to the equity holders of the parent
|
171
|
(15)
|
156
|
135
|
6
|
141
|
|
====
|
====
|
====
|
====
|
====
|
====
|
|
|
|
|
|
|
|
Earnings per ordinary share
(note 6)
|
|
|
|
|
|
|
Continuing operations:
|
|
|
|
|
|
|
|
Basic
|
|
|
54.0¢
|
|
|
48.4¢
|
|
Diluted
|
|
|
53.1¢
|
|
|
47.0¢
|
|
Adjusted
|
59.2¢
|
|
|
47.0¢
|
|
|
|
Adjusted diluted
|
58.2¢
|
|
|
45.6¢
|
|
|
Total operations:
|
|
|
|
|
|
|
|
Basic
|
|
|
54.0¢
|
|
|
49.1¢
|
|
Diluted
|
|
|
53.1¢
|
|
|
47.6¢
|
|
Adjusted
|
59.2¢
|
|
|
47.0¢
|
|
|
|
Adjusted diluted
|
58.2¢
|
|
|
45.6¢
|
|
|
|
====
|
|
====
|
====
|
|
====
|
InterContinental
Hotels Group
PLC
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the three and six months ended 30 June 2011
|
2011
3
months ended 30 June
$m
|
2010
3
months ended 30 June
$m
|
2011
6
months ended 30 June
$m
|
2010
6
months ended 30 June
$m
|
|
|
|
|
|
Profit for the period
|
87
|
87
|
156
|
141
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
Available-for-sale financial assets:
|
|
|
|
|
|
Gains on valuation
|
12
|
13
|
12
|
19
|
|
Losses reclassified to income on impairment
|
3
|
-
|
3
|
1
|
Cash flow hedges:
|
|
|
|
|
|
Losses arising during the period
|
-
|
-
|
-
|
(2)
|
|
Reclassified to financial expenses
|
1
|
1
|
3
|
3
|
Defined benefit pension plans:
|
|
|
|
|
|
Actuarial (losses)/gains, net of related tax: 2011 3
months $1m credit, 6 months $1m charge (2010 3 months $8m credit, 6
months $7m credit)
|
(10)
|
(25)
|
2
|
(18)
|
|
Change in asset restriction on plans in surplus and
liability in respect of funding commitments, including related tax
charge of: 2011 3 months $nil, 6 months $2m (2010 3 months $nil; 6
months $nil)
|
1
|
4
|
(3)
|
1
|
Exchange differences on retranslation of foreign
operations, net of related tax: 2011 3 months $2m charge, 6 months $2m
charge (2010 3 months $3m credit, 6 months $3m credit)
|
2
|
(24)
|
14
|
(45)
|
Tax related to pension contributions
|
1
|
-
|
3
|
1
|
|
____
|
____
|
____
|
____
|
Other comprehensive
income/(loss) for the period
|
10
|
(31)
|
34
|
(40)
|
|
____
|
____
|
____
|
____
|
Total comprehensive income for
the period
|
97
|
56
|
190
|
101
|
|
===
|
====
|
====
|
====
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
|
Equity holders of the parent
|
96
|
56
|
189
|
101
|
|
Non-controlling interest
|
1
|
-
|
1
|
-
|
|
_____
|
_____
|
_____
|
_____
|
|
97
|
56
|
190
|
101
|
|
=====
|
=====
|
=====
|
=====
|
InterContinental
Hotels Group
PLC
GROUP STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2011
|
6
months ended 30 June 2011
|
|
Equity
share capital
|
Other
reserves*
|
Retained
earnings
|
Non-controlling
interest
|
Total
equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
At beginning of the period
|
155
|
(2,659)
|
2,788
|
7
|
291
|
|
|
|
|
|
|
Total comprehensive income for the period
|
-
|
31
|
158
|
1
|
190
|
Issue of ordinary shares
|
6
|
-
|
-
|
-
|
6
|
Movement in shares in employee share trusts
|
-
|
26
|
(80)
|
-
|
(54)
|
Equity-settled share-based cost
|
-
|
-
|
18
|
-
|
18
|
Tax related to share schemes
|
-
|
-
|
10
|
-
|
10
|
Equity dividends paid
|
-
|
-
|
(102)
|
-
|
(102)
|
Exchange and other adjustments
|
5
|
(5)
|
-
|
-
|
-
|
|
____
|
____
|
____
|
____
|
____
|
At end of the period
|
166
|
(2,607)
|
2,792
|
8
|
359
|
|
====
|
====
|
====
|
====
|
====
|
|
6
months ended 30 June 2010
|
|
Equity
share capital
|
Other
reserves*
|
Retained
earnings
|
Non-controlling
interest
|
Total
equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
At beginning of the period
|
142
|
(2,649)
|
2,656
|
7
|
156
|
|
|
|
|
|
|
Total comprehensive income for the period
|
-
|
(24)
|
125
|
-
|
101
|
Issue of ordinary shares
|
12
|
-
|
-
|
-
|
12
|
Movement in shares in employee share trusts
|
-
|
(2)
|
(28)
|
-
|
(30)
|
Equity-settled share-based cost
|
-
|
-
|
6
|
-
|
6
|
Tax related to share schemes
|
-
|
-
|
7
|
-
|
7
|
Equity dividends paid
|
-
|
-
|
(84)
|
-
|
(84)
|
Exchange and other adjustments
|
(10)
|
10
|
-
|
-
|
-
|
|
____
|
____
|
____
|
____
|
____
|
At end of the period
|
144
|
(2,665)
|
2,682
|
7
|
168
|
|
====
|
====
|
====
|
====
|
====
|
*
|
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 FINANCIAL POSITION
30 June 2011
|
2011
30
June
|
2010
30
June
|
2010
31
December
|
|
$m
|
$m
|
$m
|
ASSETS
|
|
|
|
Property, plant and equipment
|
1,401
|
1,654
|
1,690
|
Goodwill
|
96
|
78
|
92
|
Intangible assets
|
277
|
253
|
266
|
Investment in associates and joint ventures
|
80
|
43
|
43
|
Retirement benefit assets
|
6
|
10
|
5
|
Other financial assets
|
154
|
151
|
135
|
Deferred tax receivable
|
116
|
86
|
79
|
|
_____
|
_____
|
_____
|
Total non-current assets
|
2,130
|
2,275
|
2,310
|
|
_____
|
_____
|
_____
|
Inventories
|
4
|
4
|
4
|
Trade and other receivables
|
427
|
421
|
371
|
Current tax receivable
|
4
|
50
|
13
|
Cash and cash equivalents
|
55
|
48
|
78
|
|
_____
|
_____
|
_____
|
Total current assets
|
490
|
523
|
466
|
Non-current assets classified as held for sale
|
258
|
82
|
-
|
|
______
|
______
|
______
|
Total assets (note 3)
|
2,878
|
2,880
|
2,776
|
|
=====
|
=====
|
=====
|
LIABILITIES
|
|
|
|
Loans and other borrowings
|
(54)
|
(111)
|
(18)
|
Derivative financial instruments
|
(3)
|
(6)
|
(6)
|
Trade and other payables
|
(645)
|
(713)
|
(722)
|
Provisions
|
(23)
|
(38)
|
(8)
|
Current tax payable
|
(120)
|
(188)
|
(167)
|
|
_____
|
_____
|
_____
|
Total current liabilities
|
(845)
|
(1,056)
|
(921)
|
|
_____
|
_____
|
_____
|
Loans and other borrowings
|
(804)
|
(916)
|
(776)
|
Derivative financial instruments
|
(34)
|
(50)
|
(38)
|
Retirement benefit obligations
|
(190)
|
(159)
|
(200)
|
Trade and other payables
|
(488)
|
(427)
|
(464)
|
Provisions
|
(3)
|
-
|
(2)
|
Deferred tax payable
|
(94)
|
(100)
|
(84)
|
|
_____
|
_____
|
_____
|
Total non-current liabilities
|
(1,613)
|
(1,652)
|
(1,564)
|
Liabilities classified as held for sale
|
(61)
|
(4)
|
-
|
|
_____
|
_____
|
_____
|
Total liabilities
|
(2,519)
|
(2,712)
|
(2,485)
|
|
=====
|
=====
|
=====
|
Net assets
|
359
|
168
|
291
|
|
=====
|
=====
|
=====
|
EQUITY
|
|
|
|
Equity share capital
|
166
|
144
|
155
|
Capital redemption reserve
|
10
|
10
|
10
|
Shares held by employee share trusts
|
(10)
|
(5)
|
(35)
|
Other reserves
|
(2,898)
|
(2,890)
|
(2,894)
|
Unrealised gains and losses reserve
|
67
|
49
|
49
|
Currency translation reserve
|
224
|
171
|
211
|
Retained earnings
|
2,792
|
2,682
|
2,788
|
|
______
|
______
|
______
|
IHG shareholders’ equity
|
351
|
161
|
284
|
Non-controlling interest
|
8
|
7
|
7
|
|
______
|
______
|
______
|
Total equity
|
359
|
168
|
291
|
|
=====
|
=====
|
=====
|
InterContinental
Hotels Group
PLC
GROUP STATEMENT OF CASH FLOWS
For the six months ended 30 June 2011
|
2011
6
months ended
30
June
|
2010
6
months ended
30
June
|
|
$m
|
$m
|
|
|
|
Profit for the period
|
156
|
141
|
Adjustments for:
|
|
|
|
Net financial expenses
|
32
|
31
|
|
Income tax charge
|
49
|
53
|
|
Depreciation and amortisation
|
51
|
55
|
|
Exceptional operating items
|
32
|
(4)
|
|
Equity-settled share-based cost, net of payments
|
15
|
-
|
|
Other non-cash movements
|
(1)
|
(2)
|
|
_____
|
_____
|
Operating cash flow before movements in working capital
|
334
|
274
|
Net change in loyalty programme liability and System Fund
surplus
|
83
|
58
|
Other changes in net working capital
|
(190)
|
(56)
|
Utilisation of provisions
|
(7)
|
(27)
|
Retirement benefit contributions, net of cost
|
(11)
|
(2)
|
Cash flows relating to exceptional operating items
|
(29)
|
(9)
|
|
_____
|
_____
|
Cash flow from operations
|
180
|
238
|
Interest paid
|
(17)
|
(18)
|
Interest received
|
1
|
1
|
Tax paid on operating activities
|
(51)
|
(40)
|
|
_____
|
_____
|
Net cash from operating
activities
|
113
|
181
|
|
_____
|
_____
|
Cash flow from investing
activities
|
|
|
Purchases of property, plant and equipment
|
(18)
|
(33)
|
Purchase of intangible assets
|
(18)
|
(11)
|
Purchases of other financial assets
|
(12)
|
(3)
|
Purchases of associates and joint ventures
|
(34)
|
-
|
Disposal of assets, net of costs and cash disposed of
|
71
|
4
|
Proceeds from associates and other financial assets
|
5
|
13
|
Tax received on disposals
|
-
|
2
|
|
_____
|
_____
|
Net cash from investing
activities
|
(6)
|
(28)
|
|
_____
|
_____
|
Cash flow from financing
activities
|
|
|
Proceeds from the issue of share capital
|
6
|
12
|
Purchase of own shares by employee share trusts
|
(57)
|
(23)
|
Dividends paid to shareholders
|
(102)
|
(84)
|
Decrease in borrowings
|
(3)
|
(48)
|
|
_____
|
_____
|
Net cash from financing
activities
|
(156)
|
(143)
|
|
_____
|
_____
|
|
|
|
Net movement in cash and cash
equivalents in the period
|
(49)
|
10
|
Cash and cash equivalents at beginning of the period
|
78
|
40
|
Exchange rate effects
|
(1)
|
(2)
|
|
_____
|
_____
|
Cash and cash equivalents at end
of the period
|
28
|
48
|
|
=====
|
=====
|
Comprising:
|
|
|
|
Cash and cash equivalants
|
55
|
48
|
|
Overdrafts included within current loans and other
borrowings
|
(27)
|
-
|
|
____
|
____
|
|
28
|
48
|
|
====
|
====
|
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’. They have been prepared on a consistent basis
using the accounting policies set out in the InterContinental Hotels
Group PLC (the Group or IHG) Annual Report and Financial Statements for
the year ended 31 December 2010.
These condensed interim financial statements are
unaudited and do not constitute statutory accounts of the Group within
the meaning of Section 435 of the Companies Act 2006. 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
2010 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.
After making enquiries, the directors have concluded that
the Company and the Group have adequate resources to continue in
operational existence for the foreseeable future. Accordingly,
they continue to adopt the going concern basis in preparing the
half-yearly condensed financial statements
|
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=
£0.62 (2011 3 months, $1 = £0.61; 2010 6 months, $1 =
£0.66; 2010 3 months, $1=£0.67). In the case of the euro,
the translation rate for the six months ended 30 June is $1 = €0.71
(2011 3 months, $1 = €0.70; 2010 6 months, $1 = €0.75; 2010 3 months,
$1 = €0.79).
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=£0.62 (2010 31
December $1 = £0.64; 2010 30 June $1 = £0.67). In the case
of the euro, the translation rate is $1 = €0.69 (2010 31 December $1 =
€0.75; 2010 30 June $1 = €0.81).
|
3.
|
Segmental information
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
2011
|
2010
|
2011
|
2010
|
|
|
3
months ended
30
June
|
3
months ended
30
June
|
6
months ended
30
June
|
6
months ended
30
June
|
|
|
$m
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
|
Americas
|
222
|
215
|
416
|
393
|
|
EMEA
|
129
|
102
|
224
|
192
|
|
Asia Pacific
|
76
|
68
|
156
|
137
|
|
Central
|
27
|
25
|
54
|
50
|
|
|
____
|
____
|
____
|
____
|
|
Total revenue
|
454
|
410
|
850
|
772
|
|
|
====
|
====
|
====
|
====
|
|
|
|
|
|
|
|
All results relate to continuing operations.
|
|
Profit
|
2011
3
months ended
30
June
$m
|
2010
3
months ended
30
June
$m
|
2011
6
months ended
30
June
$m
|
2010
6
months ended
30
June
$m
|
|
|
|
|
|
|
|
Americas
|
128
|
107
|
225
|
179
|
|
EMEA
|
48
|
37
|
71
|
58
|
|
Asia Pacific
|
21
|
17
|
46
|
35
|
|
Central
|
(40)
|
(25)
|
(73)
|
(53)
|
|
|
____
|
____
|
____
|
____
|
|
Reportable segments’ operating
profit
|
157
|
136
|
269
|
219
|
|
Exceptional operating items (note 4)
|
(30)
|
6
|
(32)
|
4
|
|
|
____
|
____
|
____
|
____
|
|
Operating profit
|
127
|
142
|
237
|
223
|
|
|
|
|
|
|
|
Financial income
|
1
|
-
|
1
|
1
|
|
Financial expenses
|
(17)
|
(16)
|
(33)
|
(32)
|
|
|
____
|
____
|
____
|
____
|
|
Profit before tax
|
111
|
126
|
205
|
192
|
|
|
====
|
===
|
====
|
====
|
|
|
|
|
|
|
|
All results relate to continuing operations.
|
|
Assets
|
2011
30
June
$m
|
2010
30
June
$m
|
2010
31
December
$m
|
|
|
|
|
|
|
Americas
|
909
|
1,058
|
891
|
|
EMEA
|
923
|
827
|
856
|
|
Asia Pacific
|
669
|
630
|
665
|
|
Central
|
202
|
181
|
194
|
|
|
____
|
____
|
____
|
|
Segment assets
|
2,703
|
2,696
|
2,606
|
|
|
|
|
|
|
Unallocated assets:
|
|
|
|
|
Deferred tax receivable
|
116
|
86
|
79
|
|
Current tax receivable
|
4
|
50
|
13
|
|
Cash and cash equivalents
|
55
|
48
|
78
|
|
|
____
|
____
|
____
|
|
Total assets
|
2,878
|
2,880
|
2,776
|
|
|
====
|
====
|
====
|
4.
|
Exceptional items
|
|
|
2011
3
months
ended
30 June
$m
|
2010
3
months
ended
30 June
$m
|
2011
6
months
ended
30 June
$m
|
2010
6
months
ended
30 June
$m
|
|
Continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
Exceptional operating items
|
|
|
|
|
|
|
Administrative expenses:
|
|
|
|
|
|
|
Holiday Inn brand relaunch (a)
|
-
|
(2)
|
-
|
(3)
|
|
|
Litigation provisions (b)
|
-
|
-
|
(22)
|
-
|
|
|
Resolution of commercial dispute (c)
|
(37)
|
-
|
(37)
|
-
|
|
|
|
____
|
____
|
____
|
____
|
|
|
|
(37)
|
(2)
|
(59)
|
(3)
|
|
|
Other operating income and expenses:
|
|
|
|
|
|
|
Gain on sale of other financial assets (d)
|
-
|
8
|
-
|
8
|
|
|
VAT refund (e)
|
-
|
-
|
9
|
-
|
|
|
Gain on disposal of hotels (f)
|
9
|
-
|
9
|
-
|
|
|
|
_____
|
_____
|
_____
|
_____
|
|
|
|
9
|
8
|
18
|
8
|
|
|
Impairment:
|
|
|
|
|
|
|
Other financial assets (g)
|
(3)
|
-
|
(3)
|
(1)
|
|
|
Reversal of previously recorded impairment (h)
|
1
|
-
|
12
|
-
|
|
|
|
____
|
____
|
____
|
____
|
|
|
|
(2)
|
-
|
9
|
(1)
|
|
|
|
____
|
____
|
____
|
____
|
|
|
(30)
|
6
|
(32)
|
4
|
|
|
====
|
====
|
====
|
====
|
|
Tax
|
|
|
|
|
|
Tax on exceptional operating items
|
9
|
(4)
|
11
|
-
|
|
Exceptional tax credit (i)
|
6
|
-
|
6
|
-
|
|
|
____
|
____
|
____
|
____
|
|
|
15
|
(4)
|
17
|
-
|
|
|
====
|
====
|
====
|
====
|
|
Discontinued operations:
|
|
|
|
|
|
Gain on disposal of assets:
|
|
|
|
|
|
Tax credit (j)
|
-
|
-
|
-
|
2
|
|
|
====
|
====
|
====
|
====
|
|
|
|
|
|
|
|
|
|
These items are treated as exceptional by reason of their
size or nature.
|
|
a)
|
Related to costs incurred in support of the worldwide
relaunch of the Holiday Inn brand family that was announced on 24
October 2007 and substantially completed in 2010.
|
|
b)
|
Estimate of the amount potentially payable in respect of
a prior year claim following an unfavourable court judgement in the
Americas on 23 February 2011. Any final
amount will not be known until the court process is complete.
|
|
c)
|
Relates to the settlement of a prior period commercial
dispute in the EMEA region.
|
|
d)
|
Related to the gain on sale of an investment in the EMEA
region.
|
|
e)
|
Arises in the UK and relates to periods prior to 1996.
|
|
f)
|
Relates to the sale of three hotels in North America.
|
|
g)
|
Relates to available-for-sale equity investments subject
to prolonged declines in their fair value below cost.
|
|
h)
|
Mainly relates to the partial reversal of a prior year
impairment charge recorded in respect of a North American hotel that
was sold in June 2011.
|
|
i)
|
Relates to a revision of the estimated tax impacts of an
internal reorganisation completed in 2010.
|
|
j)
|
Related to tax refunded in respect of a prior year hotel
sale.
|
5.
|
Tax
|
|
The tax charge for the six months ended 30 June 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 28% (2010 28%) analysed as
follows.
|
|
|
2011
|
2011
|
2011
|
2010
|
2010
|
2010
|
|
3 months ended 30 June
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
|
Before exceptional items
|
|
|
|
|
|
|
|
Continuing operations
|
141
|
(39)
|
28%
|
120
|
(35)
|
29%
|
|
|
|
|
|
|
|
|
|
Exceptional items
|
|
|
|
|
|
|
|
Continuing operations
|
(30)
|
15
|
|
6
|
(4)
|
|
|
|
____
|
____
|
|
____
|
____
|
|
|
|
111
|
(24)
|
|
126
|
(39)
|
|
|
|
====
|
====
|
|
====
|
====
|
|
|
Analysed as:
|
|
|
|
|
|
|
|
|
UK tax
|
|
(3)
|
|
|
(4)
|
|
|
|
Foreign tax
|
|
(21)
|
|
|
(35)
|
|
|
|
|
____
|
|
|
____
|
|
|
|
|
(24)
|
|
|
(39)
|
|
|
|
|
====
|
|
|
====
|
|
|
|
2011
|
2011
|
2011
|
2010
|
2010
|
2010
|
|
6 months ended 30 June
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
|
Before exceptional items
|
|
|
|
|
|
|
|
Continuing operations
|
237
|
(66)
|
28%
|
188
|
(53)
|
28%
|
|
|
|
|
|
|
|
|
|
Exceptional items
|
|
|
|
|
|
|
|
Continuing operations
|
(32)
|
17
|
|
4
|
-
|
|
|
Discontinued operations
|
-
|
-
|
|
-
|
2
|
|
|
|
____
|
____
|
|
____
|
____
|
|
|
|
205
|
(49)
|
|
192
|
(51)
|
|
|
|
====
|
====
|
|
====
|
====
|
|
|
Analysed as:
|
|
|
|
|
|
|
|
|
UK tax
|
|
(10)
|
|
|
(5)
|
|
|
|
Foreign tax
|
|
(39)
|
|
|
(46)
|
|
|
|
|
____
|
|
|
____
|
|
|
|
|
(49)
|
|
|
(51)
|
|
|
|
|
====
|
|
|
====
|
|
|
By also excluding the effect of prior year items, the
equivalent effective tax rate for the six months ended 30 June would be
approximately 35% (2010 34%). Prior year
items have been treated as relating wholly to continuing operations.
|
6.
|
Earnings per ordinary share
|
|
Basic earnings per ordinary share is calculated by
dividing the profit for the period available for IHG equity holders by
the weighted average number of ordinary shares, excluding investment in
own shares, in issue during the period.
Diluted earnings per ordinary share is calculated by
adjusting basic earnings per ordinary share to reflect the notional
exercise of the weighted average number of dilutive ordinary share
options outstanding during the period.
Adjusted earnings per ordinary share is disclosed in
order to show performance undistorted by exceptional items, to give a
more meaningful comparison of the Group’s performance.
|
|
3 months ended 30 June
|
2011
|
2011
|
2010
|
2010
|
|
|
Continuing
operations
|
Total
|
Continuing
operations
|
Total
|
|
Basic earnings per ordinary share
|
|
|
|
|
|
Profit available for equity holders ($m)
|
87
|
87
|
87
|
87
|
|
Basic weighted average number of ordinary shares
(millions)
|
290
|
290
|
288
|
288
|
|
Basic earnings per ordinary share (cents)
|
30.0
|
30.0
|
30.2
|
30.2
|
|
|
====
|
====
|
====
|
====
|
|
Diluted earnings per ordinary
share
|
|
|
|
|
|
Profit available for equity holders ($m)
|
87
|
87
|
87
|
87
|
|
Diluted weighted average number of ordinary shares
(millions)
|
295
|
295
|
297
|
297
|
|
Diluted earnings per ordinary share
(cents)
|
29.5
|
29.5
|
29.3
|
29.3
|
|
|
====
|
====
|
====
|
====
|
|
Adjusted earnings per ordinary
share
|
|
|
|
|
|
Profit available for equity holders ($m)
|
87
|
87
|
87
|
87
|
|
Adjusting items (note 4):
|
|
|
|
|
|
|
Exceptional operating items ($m)
|
30
|
30
|
(6)
|
(6)
|
|
|
Tax on exceptional operating items ($m)
|
(9)
|
(9)
|
4
|
4
|
|
|
Exceptional tax credit ($m)
|
(6)
|
(6)
|
-
|
-
|
|
|
____
|
____
|
____
|
____
|
|
Adjusted earnings ($m)
|
102
|
102
|
85
|
85
|
|
Basic weighted average number of ordinary shares
(millions)
|
290
|
290
|
288
|
288
|
|
Adjusted earnings per ordinary share
(cents)
|
35.2
|
35.2
|
29.5
|
29.5
|
|
|
====
|
====
|
====
|
====
|
|
Diluted weighted average number of ordinary shares
(millions)
|
295
|
295
|
297
|
297
|
|
Adjusted diluted earnings per ordinary share
(cents)
|
34.6
|
34.6
|
28.6
|
28.6
|
|
|
====
|
====
|
====
|
====
|
6.
|
Earnings per ordinary share
(continued)
|
|
6 months ended 30 June
|
2011
|
2011
|
2010
|
2010
|
|
|
Continuing
operations
|
Total
|
Continuing
operations
|
Total
|
|
Basic earnings per ordinary share
|
|
|
|
|
|
Profit available for equity holders ($m)
|
156
|
156
|
139
|
141
|
|
Basic weighted average number of ordinary shares
(millions)
|
289
|
289
|
287
|
287
|
|
Basic earnings per ordinary share (cents)
|
54.0
|
54.0
|
48.4
|
49.1
|
|
|
====
|
====
|
====
|
====
|
|
Diluted earnings per ordinary
share
|
|
|
|
|
|
Profit available for equity holders ($m)
|
156
|
156
|
139
|
141
|
|
Diluted weighted average number of ordinary shares
(millions)
|
294
|
294
|
296
|
296
|
|
Diluted earnings per ordinary share
(cents)
|
53.1
|
53.1
|
47.0
|
47.6
|
|
|
====
|
====
|
====
|
====
|
|
Adjusted earnings per ordinary
share
|
|
|
|
|
|
Profit available for equity holders ($m)
|
156
|
156
|
139
|
141
|
|
Adjusting items (note 4):
|
|
|
|
|
|
|
Exceptional operating items ($m)
|
32
|
32
|
(4)
|
(4)
|
|
|
Tax on exceptional operating items ($m)
|
(11)
|
(11)
|
-
|
-
|
|
|
Exceptional tax credit ($m)
|
(6)
|
(6)
|
-
|
-
|
|
|
Gain on disposal of discontinued operations, net of tax
($m)
|
-
|
-
|
-
|
(2)
|
|
|
____
|
____
|
____
|
____
|
|
Adjusted earnings ($m)
|
171
|
171
|
135
|
135
|
|
Basic weighted average number of ordinary shares
(millions)
|
289
|
289
|
287
|
287
|
|
Adjusted earnings per ordinary share
(cents)
|
59.2
|
59.2
|
47.0
|
47.0
|
|
|
====
|
====
|
====
|
====
|
|
Diluted weighted average number of ordinary shares
(millions)
|
294
|
294
|
296
|
296
|
|
Adjusted diluted earnings per ordinary share
(cents)
|
58.2
|
58.2
|
45.6
|
45.6
|
|
|
====
|
====
|
====
|
====
|
|
Earnings per ordinary share from
discontinued operations
|
|
|
2011
3
months ended
30
June
cents
per share
|
2010
3
months ended
30
June
cents
per share
|
2011
6
months ended
30
June
cents
per share
|
2010
6
months ended
30
June
cents
per share
|
|
Basic
|
-
|
-
|
-
|
0.7
|
|
Diluted
|
-
|
-
|
-
|
0.6
|
|
|
====
|
====
|
====
|
====
|
|
The diluted weighted average number of ordinary shares is
calculated as:
|
|
|
2011
3
months ended
30
June
millions
|
2010
3
months ended
30
June
millions
|
2011
6
months ended
30
June
millions
|
2010
6
months ended
30
June
millions
|
|
Basic weighted average number of ordinary shares
|
290
|
288
|
289
|
287
|
|
Dilutive potential ordinary shares – employee share
options
|
5
|
9
|
5
|
9
|
|
|
_____
|
____
|
_____
|
____
|
|
|
295
|
297
|
294
|
296
|
|
|
====
|
====
|
====
|
====
|
7.
|
Dividends
|
|
|
2011
6
months
ended
30
June
cents
per share
|
2010
6
months
ended
30
June
cents
per share
|
2011
6
months
ended
30
June
$m
|
2010
6
months
ended
30
June
$m
|
|
Paid during the period:
|
|
|
|
|
|
Final (declared for previous year)
|
35.2
|
29.2
|
102
|
84
|
|
|
====
|
====
|
====
|
====
|
|
Proposed for the period:
|
|
|
|
|
|
Interim
|
16.0
|
12.8
|
46
|
37
|
|
|
====
|
====
|
====
|
====
|
8.
|
Net debt
|
|
|
2011
30
June
|
2010
30
June
|
2010
31
December
|
|
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
Cash and cash equivalents
|
55
|
48
|
78
|
|
Loans and other borrowings – current
|
(54)
|
(111)
|
(18)
|
|
Loans and other borrowings – non-current
|
(804)
|
(916)
|
(776)
|
|
Derivatives hedging debt values*
|
(15)
|
(40)
|
(27)
|
|
|
_____
|
____
|
____
|
|
Net debt
|
(818)
|
(1,019)
|
(743)
|
|
|
====
|
====
|
====
|
|
Finance lease liability included above
|
(208)
|
(205)
|
(206)
|
|
|
====
|
====
|
====
|
|
*
|
Net debt includes the exchange element of the fair value
of currency swaps that fix the value of the Group’s £250m 6%
bonds at $415m. An equal and opposite
exchange adjustment on the retranslation of the £250m 6% bonds is
included in non-current loans and other borrowings.
|
9.
|
Movement in net debt
|
|
|
2011
6
months ended
30
June
|
2010
6 months ended
30
June
|
2010
12
months ended
31
December
|
|
|
$m
|
$m
|
$m
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents
|
(49)
|
10
|
51
|
|
Add back cash flows in respect of other components of net
debt:
|
|
|
|
|
Decrease in other borrowings
|
3
|
48
|
292
|
|
|
____
|
____
|
____
|
|
(Increase)/decrease in net debt arising from cash flows
|
(46)
|
58
|
343
|
|
|
|
|
|
|
Non-cash movements:
|
|
|
|
|
Finance lease liability
|
(1)
|
(1)
|
(2)
|
|
Exchange and other adjustments
|
(28)
|
16
|
8
|
|
|
____
|
____
|
____
|
|
(Increase)/decrease in net debt
|
(75)
|
73
|
349
|
|
|
|
|
|
|
Net debt at beginning of the period
|
(743)
|
(1,092)
|
(1,092)
|
|
|
____
|
____
|
____
|
|
Net debt at end of the period
|
(818)
|
(1,019)
|
(743)
|
|
|
====
|
====
|
====
|
10.
|
Capital commitments and
contingencies
|
|
At 30 June 2011, the amount contracted for but not
provided for in the financial statements for expenditure on property,
plant and equipment and intangible assets was $19m (2010 31 December
$14m, 30 June $5m). The Group has also
committed to invest $60m in two joint ventures of which $32m had been
spent at 30 June 2011.
At 30 June 2011, the Group had contingent liabilities of
$1m (2010 31 December $8m, 30 June $10m) mainly relating to litigation
claims.
In limited cases, the Group may provide performance
guarantees to third-party owners to secure management contracts. The maximum unprovided exposure under such
guarantees is $48m (2010 31 December $90m, 30 June $86m).
From time to time, the Group is subject to legal
proceedings the ultimate outcome of each being always subject to many
uncertainties inherent in litigation. The
Group has also 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 legal proceedings
and warranties are not expected to result in material financial loss to
the Group.
|
11.
|
Events after the reporting period
|
|
On 1 July 2011, the Group completed the sale of a hotel
asset and partnership interest in Australia for proceeds equivalent to
US$71m realising an estimated profit of US$28m.
On 25 July 2011, the Group paid a security deposit of
$37m to Hospitality Properties Trust (HPT) in connection with the
consolidation, revision and extension of its four existing management
agreements into one new 25 year management agreement, effective 1 July
2011.
|
|
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
2011 which comprises the Group income statement, Group statement of
comprehensive income, Group statement of changes in equity, Group
statement of financial position, Group statement of cash flows 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 International
Standard on Review Engagements 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 2011 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
8 August 2011
|
___________________
[1] Underlying fee based margin is defined as
operating profit margin adjusted for owned and leased hotels, managed
leases and one individually significant liquidated damages receipt in
2011. |