|Financial results||2010||2009||% change||% change CER|
|Total adjusted EPS||27.1¢||32.5¢||(17)%|
|Total basic EPS1||35.8¢||23.4¢||53%|
|2||See appendix 5 for definition|
Commenting on the results, Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC said:
"The quarter saw a return to rate growth for the first time since early 2009, a clear sign that the recovery is gathering pace. Global RevPAR was up 8.1% with Greater China RevPAR increasing 24.4% and Europe, Middle East and Africa RevPAR grew at its fastest pace for two years.
"In the Americas, where RevPAR growth in the important midscale segment started to accelerate, the sharpest improvement was seen in our Holiday Inn brand family with guests staying more and paying more at the relaunched hotels. The wider benefits of the relaunch are clear with Holiday Inn signings in the US up on 2009.
"The attractiveness of our system and brand strength is reflected in our leading 17% share of the global pipeline of new build hotels, our re-entry into the priority Hawaii market with Holiday Inn and an alliance with Las Vegas Sands Corp to bring The Venetian and Palazzo Resorts into the InterContinental system.
"While visibility is still limited, business confidence and corporate profitability remain positive and, with supply anticipated to stay below historic levels, industry trends look favourable. With over 1,200 hotels in our development pipeline we expect to create over 160,000 new jobs in the next few years. We are focused on driving share, improving margins while investing behind growth and creating value for shareholders. Our balance sheet is in excellent shape and we continue to generate significant cash flow."
RevPAR increased 6.7% in the third quarter, driven mainly by occupancy with rate improving by 0.8%. Revenues increased 4% to $215m; excluding the impact of the disposal of InterContinental Buckhead Atlanta revenues increased 8%.
Operating profit increased 28% from $82m to $105m. Franchised operating profit grew 9% driven by RevPAR growth of 6.2% and rooms growth of 2.5%. In the managed business, operating profit of $2m compares to a loss of $12m in 2009 which included a $12m charge for priority guarantee shortfalls. Owned and leased operating profit grew $1m to $4m reflecting RevPAR growth of 7.3% partly offset by the loss of profits from InterContinental Buckhead Atlanta.
RevPAR increased 9.7% in the third quarter, with rate improving by 3.1%. Of our major markets, performance was strongest in Germany where RevPAR grew 22.2% and, despite continuing mixed trading conditions, RevPAR in the Middle East grew 5.4%. UK RevPAR growth of 6.7%, driven by a rate increase of 3.6%, marked a strong improvement on second quarter RevPAR growth of 3.4%. Revenues increased 4% to $105m (11% CER).
Operating profit declined by $1m to $35m (increased 3% CER). Franchised operating profit grew 6% to $17m (13% CER) driven by a 10% increase in royalty fee revenue. Managed operating profit declined by $2m to $13m ($1m CER) due to the timing of payments under guarantees. Owned and leased operating profit grew $1m to $13m ($2m CER) driven by 13.7% RevPAR growth at InterContinental Park Lane and 8.8% growth at InterContinental Paris Le Grand.
RevPAR increased 12.0% in the third quarter, with 4.1% growth in rate. Greater China was the strongest performing region with RevPAR growth of 24.4%, boosted by the World Expo in Shanghai where RevPAR grew 88.6%. Revenues increased 19% to $74m (16% CER).
Operating profit increased 18% to $20m (18% CER). Franchised operating profit declined by $1m to $1m. Managed operating profit grew 11% to $20m (6% CER) driven by 13.5% RevPAR growth and 10% rooms growth across the region. Operating profit at owned and leased hotels increased 20% to $6m reflecting RevPAR growth of 7.5% at InterContinental Hong Kong.
Third quarter regional and central costs of $74m are up $35m on 2009 levels due to performance based incentive costs, including a $25m year on year impact of re-assessments of likely payments under long term incentive plans.
The interest charge for the period increased $3m to $16m as the impact of lower levels of average net debt was offset by a higher average cost of debt following the issuance of a seven year £250m bond in the fourth quarter of 2009.
Based on the position at the end of the third quarter, the tax charge has been calculated using an estimated annual tax rate of 26% (Estimated annual tax rate at Q3 2009: 19%).
Net debt of $801m (including the $206m finance lease on the InterContinental Boston) is down $291m on the position as at year end 2009 due to higher operating profits, improved working capital, $135m receipts including $105m from the disposal of the InterContinental Buckhead Atlanta and reduced capital expenditure of $69m.
|Net openings / (removals)||833||(777)||1,237||1,293|
|Three months to 30 September $m||Total||Americas||EMEA||Asia Pacific||Central|
|Franchised operating profit||131||122||113||104||17||16||1||2||-||-|
|Managed operating profit||35||21||2||(12)||13||15||20||18||-||-|
|Owned and leased operating profit||23||20||4||3||13||12||6||5||-||-|
|Operating profit pre central overheads||160||135||105||82||35||36||20||17||-||-|
|Nine months to 30 September $m||Total||Americas||EMEA||Asia Pacific||Central|
|Franchised operating profit||350||331||301||281||45||46||4||4||-||-|
|Managed operating profit||110||62||15||(21)||45||48||50||35||-||-|
|Owned and leased operating profit||56||45||8||7||28||22||20||16||-||-|
|Operating profit pre central overheads||432||359||284||231||93||94||55||34||-||-|
|Actual currency*||Constant currency**||Actual currency*||Constant currency**||Actual currency*||Constant
|Actual currency*||Constant currency**|
|*||US dollar actual currency|
|**||Translated at constant 2009 exchange rates|
|***||After central overheads|
Total gross revenue is defined as 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.
Operating margins in the fee business are adjusted for owned and leased hotels, individually significant liquidated damages payments, HPT guarantee payments and excludes the benefit in 2009 of non-sustainable incentive compensation cost savings.
(Heather Wood; Catherine Dolton):
|+44 (0) 1895 512 176|
(Leslie McGibbon, Giles Deards):
|+44 (0) 1895 512 425
+44 (0) 1895 512 275
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.
A conference call with Richard Solomons (Chief Financial Officer and Head of Commercial Development) will commence at 9.30am (London time) on 9 November. There will be an opportunity to ask questions.
|International dial-in:||+44 (0)20 7108 6370|
|UK Free Call:||0808 238 6029|
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 5447.
|International dial-in:||+44 (0)20 7970 4982|
|UK Free Call:||0800 018 2365|
There will also be a conference call, primarily for US investors and analysts, at 10.00am (Eastern Standard Time) on 9 November with Richard Solomons (Chief Financial Officer and Head of Commercial Development). There will be an opportunity to ask questions.
|International dial-in:||+44 (0)20 7108 6370|
|US Dial-in:||+1 517 345 9004|
|US Toll Free:||866 692 5726|
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 5458.
|International dial-in:||+44 (0)20 7108 6286|
|US Free Call:||866 851 2569|
The full release and supplementary data will be available on our website from 7.00am (London time) on 9 November. The web address is www.ihg.com/Q310. To watch a video of Richard Solomons reviewing our results visit our YouTube channel at www.youtube.com/ihgplc
InterContinental Hotels Group (IHG) [LON:IHG, NYSE:IHG (ADRs)] is the world's largest hotel group by number of rooms. IHG franchises, leases, manages or owns, through various subsidiaries, over 4,500 hotels and more than 650,000 guest rooms in 100 countries and territories around the world. The Group owns a portfolio of well recognised and respected 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® and also manages the world's largest hotel loyalty programme, Priority Club® Rewards with 52 million members worldwide.
IHG has over 1,200 hotels in its development pipeline, which we expect to create 160,000 jobs 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 www.ihg.com and information for the Priority Club Rewards programme at www.priorityclub.com. For the latest news from IHG, visit our online Press Office at www.ihg.com/media
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.
Download the full Third Quarter Results 2010 PDF (104 Kb)
Last updated 09 November 2010