||Three months to
|31 March 2004
|31 March 2003
|- Operating profit
|- Operating profit
|- Operating profit
|- Profit before tax
|Earnings per share (pence)
|* 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%
- 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
- 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
- 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
- Cash tax rate is expected to be below 20% for 2004 and
in the mid 20%s in the next few years.
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
"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)
|CP Brands North America
|HI Brands North America
|Express Brands North America
|HI UK Regions
|HI UK London
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:
||Tel: +44 (0)1452 562 716
||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 (www.ichotelsgroup.com).
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 - www.intercontinental.com for
InterContinental Hotels & Resorts, www.crowneplaza.com for
Crowne Plaza Hotels & Resorts, www.holiday-inn.com for
Holiday Inn hotels, www.hiexpress.com for
Holiday Inn Express hotels, www.staybridge.com for
Staybridge Suites by Holiday Inn hotels, and www.candlewoodsuites.com for
Candlewood Suites, and for the Group's rewards programme, www.priorityclub.com.
For the latest news from InterContinental Hotels Group, visit our online Press
Office at www.ihgplc.com/media.
full announcement (PDF format)