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Results to 31 December 2003

Highlights

Unaudited Pro-forma       Audited
  12 months to 31 Dec 2003£m 12 months to 31 Dec 2002£m %change 15 months to 31 Dec 2003£m 12 months to 30 Sept 2002£m
Hotels          
- Turnover 1,487 1,538 (3.3)% 1,870 1,532
- EBItdA 357 385 (7.3)% 446 405
- Operating profit 200 239 (16.3)% 251 266
           
Soft Drinks          
- Turnover 674 611 10.3% 820 602
- EBItdA 124 115 7.8% 149 109
- Operating profit 83 68 22.1% 95 63
           
Group          
- Turnover 2,161 2,149 0.6% 3,483 3,615
- EBItdA 481 500 (3.8)% 786 889
- Operating profit 283 307 (7.8)% 483 618
- Exceptional Items          
   - Operating - - - (51) (77)
   - Non-operating - - - (349) 53
- Profit before tax 244 258 (5.4)% 36 534
Earnings per share - Basic (pence) - - - 2.6 62.5
Earnings per share - Adjusted (pence) 20.8 21.9 (5.0)% 48.4 51.4
 
NB. The unaudited pro forma results and audited operating profit and EBItdA are shown before exceptional items. The audited results include the results of Mitchells & Butlers until Separation.
 
  • Hotels pro forma operating profit for the twelve months to 31 December 2003 down 16% to 200m (down 11% at constant currency):
    • Americas flat for the twelve months to 31 December 2003 at $262m reflecting the resilience of our midscale franchise business.
    • EMEA down 23% to £92m. Challenging trading conditions in continental Europe, particularly France and Germany mitigated by improving trends in the Holiday Inn UK estate in the second half.
    • Asia Pacific down 51% to $19m for the twelve months to 31 December 2003 primarily as a consequence of the effect of SARS.
  • Total Hotels pro forma operating profit improved in third and fourth quarters with fourth quarter up 11% to 49m.
  • Continued excellent performance for Soft Drinks with pro forma operating profit up 22%, for the 12 months to 31 December 2003 against prior year, to £83m.
  • Overhead cost reductions in 2003 of $76m against 2003 budget; annualised savings of $110m exceeding target of $75m.
  • Significant disposals made in 2003 at or above book value with proceeds of £254m for the 12 months to 31 December 2003. Further £20m of disposals already completed in 2004.
  • Continued strong cash and capital control. Net debt reduced to £569m at 31 December 2003.
  • £250m share buy back programme announced.
  • Disposal programme to involve further sale of assets with net book value of between £800 million and £1 billion subject to no significant adverse changes in market conditions.
  • Soft Drinks exclusive bottling agreement with Pepsi renewed. Opportunity for an initial public offering from 2005 (refer to www.ihgplc.com/britannia)

Commenting on the results, David Webster, chairman, InterContinental Hotels Group PLC, said:

"Following the successful Separation of the Six Continents' businesses in April 2003, InterContinental has established itself as a powerful independent hotels company. In the fifteen months to 31 December 2003 we faced very testing trading conditions but our results were sound.

I am delighted and excited to be part of an organisation with such a formidable portfolio of brands and an unmatched presence in world markets and I am confident that the company is well positioned to grow strongly as more stable conditions return."

Commenting on the results, Richard North, chief executive, InterContinental Hotels Group PLC, said:

"The fifteen months to 31 December 2003 was probably the most difficult period experienced in the hotel industry in living memory.

In many ways, however, we have had a great year. Last spring we set out in our listing particulars a series of actions designed to improve the overall performance of the company. We are delivering on those promises. We have reorganised the company, greatly strengthened management, radically reduced costs beating our published targets, significantly cut capital expenditure, started an asset disposal programme and today we are now announcing a share buy back.

Commenting on current trading, he continued:

"We have for some time been cautious when commenting on current trading. However, trading over the last six months now gives us some confidence to say that we believe conditions are improving steadily in both the Americas and the UK. Furthermore, trading in Asia Pacific has recovered substantially since the SARS scare. However, continental Europe remains difficult and this is being exacerbated by the weakness of the US dollar."

For further information, please contact:

Karen Whitworth, Investor Relations Office: 01753 410177
Mobile: 07808 095638
Dee Cayhill, Corporate Affairs 01753 410423
Kathryn Holland, Corporate Affairs   01753 410425

Teleconference

A teleconference, including a web cast of the teleconference presentation slides, will commence at 4.00 pm (London time) on 11 March. The conference call will conclude at approximately 4.30 pm (London time).

To join us for this conference call please dial the relevant number below by 4.00 pm
(London time).

International dial-in Tel: +44 (0) 1452 562 716
UK dial-in Tel: 0800 073 8967

Web cast

There will be a live audio web cast of the presentation of the results on the web address www.ihgplc.com . A video and audio web cast of the presentation is expected to be on this website later on today and will remain on this website for the foreseeable future.

Investor Information

An Interim dividend of 4.05 pence per share was paid in October 2003. The Board proposes, subject to shareholder approval at the AGM on 1 June 2004, to pay a final dividend of 9.45 pence per share on 7 June 2004. The ex dividend date for this payment will be 24 March 2004 and the record date 26 March 2004.

View the full announcement in pdf format.

Last updated 25 January 2008

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