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First Quarter Results to 31 March 2004


  Three months to  
31 March 2004
31 March 2003
pro forma
- Turnover 348 341 2.1%
- EBItdA 83 68 22.1%
- Operating profit 44 29 51.7%
Soft Drinks      
- Turnover 188 164 14.6%
- EBItdA 22 21 4.8%
- Operating profit 10 8 25.0%
- Turnover 536 505 6.1%
- EBItdA 105 89 18.0%
- Operating profit 54 37 45.9%
- Profit before tax 50 25 100.0%
Earnings per share (pence)      
- Basic 8.4p -  
- Adjusted 5.2p 2.2p 136.4%
* EBItdA, operating profit, profit before tax and adjusted earnings per share are stated before exceptional items.


  • Group operating profit for first quarter up by 45.9%; adjusted earnings per share up 136.4% due to lower interest (from significantly reduced debt levels) and a reduced tax rate arising from the expected resolution of prior year tax matters.
  • Hotels operating profit up 51.7% for the quarter, against weak comparables in 2003:
    • Americas operating profit up 18% from $50m to $59m, although flat in sterling, driven by underlying RevPAR improvement of 5.5% across the business; the InterContinental brand gained 10.0% in RevPAR
    • EMEA performance improved from £13m to £16m, up 23.1%, driven by continued success in UK & Ireland, where the O&L Holiday Inn business outperformed the market with underlying RevPAR growth of 17.3% in London and 8.2% in the regions. This was offset by weak Continental European performance.
    • Asia Pacific operating profit up 42.9% from $7m to $10m, driven by strong performance of the InterContinental Hong Kong
    • Central overheads down by £10m in the quarter as the anticipated cost savings continue to be delivered
  • Britvic delivered another strong quarter with operating profit up 25.0%
  • Continued progress on priorities:
    • Our focus on driving revenue delivered strong RevPAR growth across the business. We are seeing positive trends in our system delivery, which is up 2.9 %pts year on year at 34.0% of room-nights for the quarter. Direct internet revenue delivery is up 71% year on year. We also launched our new lifestyle brand, Hotel Indigo, in the US.
    • We remain on target with overhead cost savings and confirm that we expect to continue to manage out inflationary rises, new business costs and exchange rate gains with the result that 2004 total cost in dollar terms will be flat on 2003.
    • We have returned more than £100m of our £250m initial return of capital. 10.5 million shares were purchased as of March 31 and 20.3 million to date at an average price of 504p.
    • Asset disposals progressing well:
      • Since demerger we have completed the sale of £314m of assets (27 hotels) slightly ahead of net book value.
      • We have signed agreements to dispose of a further 2 hotels with net proceeds of £29m, also at above net book value, and are actively progressing with the disposal of a further 13 hotels with a net book value of around £100m.
      • In addition, the next tranche of hotel assets with a net book value in excess of £500m will be placed on the market shortly.
    • Strong operating cashflow of £66m in the quarter.
  • Expected tax settlements and recognition of deferred tax assets lead to forecast tax credit in 2004:
    • With the benefit of exceptional tax items, a total net P&L tax credit of approximately 30% expected in 2004; tax charge on ordinary activities of 18% for 2004.
    • P&L tax charge in next few years likely to be in the mid-high 20%s.
    • Cash tax rate is expected to be below 20% for 2004 and in the mid 20%s in the next few years.

Current Trading

We are experiencing an encouraging recovery in both North America and the UK, with April showing continued strong performance across these two areas. We are also seeing tentative signs of the beginning of a recovery in Europe. Trading in Asia Pacific has returned to pre-SARS levels. Growth remains occupancy driven in all regions with early evidence of potential rate recovery in some US markets and London.

Commenting on the results, Richard North, Chief Executive, InterContinental Hotels Group PLC said:

" We are sharpening our focus on driving revenues in all our hotels and improving our hotel operations performance. We are planning to concentrate our development efforts on countries, such as the US, UK and China, where demographic trends and market characteristics will allow us to grow more successfully our franchise and management business using our well-established brands. We have further strengthened our business in the US through organic brand development (Hotel Indigo), and a selective brand acquisition at a very attractive price (Candlewood Suites).

"Whilst we are encouraged by the results this quarter, we continue to concentrate on improving business efficiency in order to unlock more potential and further enhance returns."

David Webster, Chairman, InterContinental Hotels Group PLC said:

"The management team continue to deliver on the commitments they have made. During our first year as a separate company, we have made good progress against our priorities. We have reorganised the group, strengthened management, cut overheads and lowered capital expenditure. At the same time the process of reducing asset intensity and returning funds to shareholders has begun. Executing the optimum strategy to deliver shareholder value and to meet shareholder expectations remains the Board's priority in the coming months"

Appendix 1: Selected RevPAR performance (comparable, year on year change)

  January February March Quarter 1 April Ytd
IC O&L -1.0% -1.4% 13.7% 4.1% 15.3% 6.9%
CP Brands North America 6.1% 1.2% 9.1% 5.7% 7.9% 6.3%
HI Brands North America 2.4% 1.8% 8.0% 4.3% 9.1% 5.5%
Express Brands North America 6.8% 6.1% 9.6% 7.6% 8.5% 7.9%
IC O&L -10.2% -5.1% 13.0% -0.3% 23.4% 5.0%
HI UK Regions 4.9% 4.4% 14.3% 8.2% -0.2% 6.0%
HI UK London 7.5% 12.3% 32.2% 17.3% 38.0% 21.9%

For further information, please contact:

Gavin Flynn, Investor Relations +44 (0) 1753 410 238
Dee Cayhill, Corporate Affairs +44 (0) 1753 410 423

Teleconference for Analysts and Shareholders

A teleconference with Richard North (Chief Executive) and Richard Solomons (Finance Director) will commence at 9.00 am (London time) on 27th May. There will be an opportunity to ask questions. The conference call will conclude at approximately 9.30 am (London time). To join us for this conference call please dial the relevant number below at the appropriate time:

International dial-in Tel: +44 (0)1452 562 716
UK dial-in Tel: 0845 245 5000

A recording of the conference call will be available for 7 days. To access this please dial the relevant number below and use the access number 1344892#

International dial in Tel: +44 (0)1452 55 00 00
UK dial in Tel: 0845 245 5205

Note to Editors:

InterContinental Hotels Group PLC of the United Kingdom [LON:IHG, NYSE:IHG (ADRs)] is the world's most global hotel company and the largest by number of rooms. InterContinental Hotels Group owns, manages, leases or franchises, through various subsidiaries, more than 3,500 hotels and 538,000 guest rooms in nearly 100 countries and territories around the world ( The Group owns a portfolio of well recognised and respected hotel brands including InterContinental® Hotels & Resorts, Crowne Plaza® Hotels & Resorts, Holiday Inn ® Hotels and Resorts, Holiday Inn Express®, Staybridge Suites®, Candlewood Suites®, and Hotel Indigo®, and also has a controlling interest in Britvic, the second largest soft drinks manufacturer in the UK.

InterContinental Hotels Group offers information and reservations capability on the Internet - for InterContinental Hotels & Resorts, for Crowne Plaza Hotels & Resorts, for Holiday Inn hotels, for Holiday Inn Express hotels, for Staybridge Suites by Holiday Inn hotels, and for Candlewood Suites, and for the Group's rewards programme,

For the latest news from InterContinental Hotels Group, visit our online Press Office at

Download full announcement (PDF format)

Last updated 25 January 2008

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