News for the Hospitality Executive
IHG Reports First Quarter 2012 Profits of $118 million, up 5%
First Quarter Results to 31st March 2012
Continuing strong RevPAR performance drives 16% underlying profit growth
“We have delivered strong performance in the quarter with global revenue per available room (RevPAR) up 7% and continued outperformance in the US and Greater China. The strength of our brands and systems, together with our scale and the close working relationships we have with our hotel owners, continue to underpin our success.
In the quarter we launched EVEN Hotels in the US and HUALUXE Hotels and Resorts in Greater China, reflecting our ability to create distinctive and innovative new brands. These will further develop our already strong position in our two largest markets over the long term, and together with our ongoing work to strengthen our existing brands, will enable us to deliver market share gains into the future.
The global economic backdrop, particularly in Europe, is still challenging, but the considerable strengths of our business including our resilient model and strong balance sheet give us confidence that we will continue to drive high quality growth.”
° All figures are before exceptional
items unless otherwise noted See appendix 3 for analysis of financial
RevPAR increased 7.7%, including rate growth of 4.2%. US RevPAR was up 7.6%, including rate growth of 4.1%. On a total basis including the benefit of new hotels, US RevPAR grew 8.4%, outperforming the industry up 7.9%.
Revenue decreased 7% to $181m and operating profit increased 3% to $100m. After adjusting for (i) owned hotel disposals in 2011 (ii) the impact of a $10m liquidated damages receipt in the managed business in 2011 and (iii) the impact of managed lease* hotels, revenue increased 6% and operating profit increased 16%. This was driven by strong RevPAR growth across the region, slightly offset by the impact of the partial closure of an owned hotel in the Caribbean.
We signed 5,097 rooms (43 hotels) in the first quarter and opened 4,244 rooms (33 hotels). Signings included Hotel Indigo hotels in Philadelphia and Wilmington and our six signings outside the US including three Staybridge Suites hotels. In line with our strategy to grow the presence of Holiday Inn in the leisure market, openings in the quarter included three resort hotels for the brand in the US and our eighth Holiday Inn Club Vacation hotel which is located in Las Vegas. This strong activity for the Holiday Inn brand family in the quarter demonstrates the ongoing benefits from the Holiday Inn relaunch.
RevPAR increased 2.6%, including rate growth of 1.2%. Despite continued macro economic uncertainty, RevPAR in our key markets remained resilient, with the UK up 2.2%, France up 2.6% and Germany up 3.3%.
Revenue increased 18% (22% at CER) to $90m and operating profit increased 25% (33% at CER) to $15m. After adjusting for the leased hotel disposal in 2011 and the impact of managed lease* hotels, revenue was broadly in line with Q1 2011 and operating profit increased 25%.
We signed 915 rooms (5 hotels) in the quarter, including an InterContinental hotel in St Petersburg, which will be our second for the brand in Russia. We opened 968 rooms (8 hotels) including Hotel Indigo hotels in Edinburgh and also in Berlin, the first for the brand in Continental Europe.
RevPAR increased 6.9%, including rate growth of 1.7%. Most markets continue to show strong growth including Saudi Arabia up 9.5%, UAE up 7.4%, South East Asia up 8.9% and Japan up 4.0%. Egypt and Bahrain continue to be impacted by political unrest with RevPAR down 13.6% and 13.9% respectively.
Revenue increased 12% (10% at CER) to $56m and operating profit increased 10% to $22m and by 16% after adjusting for the disposal in Q3 2011 of a hotel asset and partnership interest in Australia.
We signed 603 rooms (2 hotels) in the quarter, and opened 1,175 rooms (4 hotels). Openings included Holiday Inn Express Bangkok Siam, the first hotel for the brand in South East Asia; InterContinental hotels in Thailand and Doha; and the first Crowne Plaza hotel in Central Java.
Greater China continues to be our strongest market with RevPAR growth of 11.9%, including rate growth of 3.3%.
Revenue increased 10% to $54m and operating profit increased 25% to $20m. This was driven by a combination of strong RevPAR growth and the contribution from a 13% increase in net system size.
We signed 2,716 rooms (9 hotels) in the quarter, including five Crowne Plaza hotels, taking the pipeline for the brand in the region to 21,671 rooms (58 hotels). We opened 714 rooms (3 hotels) in the quarter, including Hotel Indigo Xiaman Harbour, our second hotel for the brand in Greater China. In April we opened a further 3 hotels (2,232 rooms), including the Holiday Inn Macau Cotai Central (1,224 rooms), the largest Holiday Inn in the world.
Our strong and profitable platform and leading position in Greater China result from our growing scale, expertise of our team and the quality of our relationship with owners, which we have developed over the three decades we have been operating in the region.
The interest charge for the period was $12m (Q1 2011: $16m) due to lower levels of net debt and a small non recurring cash interest receipt.
Based on the position at the end of the quarter, the tax charge has been calculated using an estimated annual tax rate of 29% (Q1 2011: 28%). The 2012 full year tax rate is expected to be in the high 20s, moving towards the low 30s in 2013. An exceptional tax credit of $79m relates to prior year matters settled in the period, together with associated deferred tax amounts.
Net debt was $577m at the end of the quarter (including the $210m finance lease on the InterContinental Boston). This is down from $846m at 31 March 2011 but up $39m on the year end position due to seasonal working capital movements.
* See appendix 5 for definition
Appendix 1: RevPAR Movement Summary
Managed lease hotels: properties that are structured for legal reasons as operating leases but with the same characteristics as management contracts.
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.
UK conference call and Q&A:
A conference call with Richard Solomons (Chief Executive Officer) and Tom Singer (Chief Financial Officer) will commence at 8.00am (London time) on Wednesday 9 May. There will be an opportunity to ask questions.
International dial-in: +44 (0)20 7108 6370
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 9 May with Richard Solomons (Chief Executive Officer) and Tom Singer (Chief Financial Officer). There will be an opportunity to ask questions.
International dial-in: +44 (0)20 7108 6370
A recording of the conference call will also be available for 7 days. To access this dial the relevant number below.
2012 Interim results: 7 August 2012
We will be announcing our half year results for the six months to 30 June on 7 August 2012. We will host a conference call with slide cast for analysts and investors on the day of the results. There will also be a conference call later the same day, primarily for US analysts and investors. There will be an opportunity to ask questions on both calls.
The full release and supplementary data will be available on our website from 7.00 am (London time) on 9 May. The web address is www.ihgplc.com/Q112. To watch a video of Tom Singer reviewing our results visit our YouTube channel at www.youtube.com/ihgplc.
IHG (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with nine hotel brands including InterContinental® Hotels & Resorts, Hotel Indigo®, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels and Resorts, Holiday Inn Express®, Staybridge Suites®, Candlewood Suites®, as well as our two newest brands, EVEN™ Hotels and HUALUXE™ Hotels & Resorts. IHG also manages Priority Club® Rewards, the world’s first and largest hotel loyalty programme with over 65 million members worldwide.
IHG franchises, leases, manages or owns over 4,500 hotels and more than 661,000 guest rooms in nearly 100 countries and territories. With more than 1,000 hotels in its development pipeline, IHG expects to recruit around 90,000 people into additional roles across its estate 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.
Visit www.ihg.com for hotel information and reservations and www.priorityclub.com for more on Priority Club Rewards. For our latest news, visit www.ihgplc.com/media, www.twitter.com/ihgplc, www.facebook.com/ihg or 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.
Reports Preliminary 2011 Financial Results with a 26% Growth in
Operating Profit to $559 million Compared to $444 million in 2010;
Global RevPAR Up 6.2% / February 2012
Posts a 33% Rise in Operating Profit Through Q3 2011 to $153 million
Compared with $115 million in the Same Period a Year Earlier; Global
RevPAR Up 6.4% Overall Led by China with RevPAR Growth of 10.8% /
Posts a 21% Rise in Operating Profit Through Q2 2011 to $269 million
Compared with $219 million in the Same Period a Year Earlier; Global
RevPAR Up 6.7% Overall; Greater China Reporting RevPAR Growth of 12.7%
/ August 2011
Posts a 35% Rise in Operating Profit Q1 2011 to $112 million Compared
with $83 million in the Same Period a Year Earlier; Global RevPAR Up
6.9% Overall; Greater China Reporting RevPAR Growth of 18.8% / May
Posts a 22% Rise in Net Income for 2010 to $444 million Compared with
$363 million in the Same Period a Year Earlie; Global RevPAR Up 6.2%
Overall; Asia Pacific Reporting RevPAR Growth of Nearly 11% /
|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|