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99.1 Half-year Report |
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Financial summary1 |
Reported |
Underlying2 | ||||
|
2016 |
2015 |
% Change |
2016 |
2015 |
% Change |
Revenue |
$838m |
$915m |
(8)% |
$771m |
$736m |
5% |
Fee Revenue3 |
$673m |
$656m |
3% |
$687m |
$656m |
5% |
Operating profit |
$344m |
$337m |
2% |
$345m |
$313m |
10% |
Adjusted EPS |
89.0¢ |
87.2¢ |
2% |
89.4 ¢ |
80.3¢ |
11% |
Basic EPS4 |
87.7¢ |
156.2¢ |
(44)% |
|
|
|
Interim dividend per share |
30.0¢ |
27.5¢ |
9% |
|
|
|
Net debt |
$1,829m |
$1,710m |
7% |
|
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Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, said: |
“We continue to execute our well-established strategy as we deliver consistent, high-quality growth and generate significant operating cash flows. We have had a good first half, delivering a 10% increase in underlying operating profit and an 11% increase in underlying EPS, underpinning our decision to increase the interim dividend by 9%.
We have driven another excellent signings performance, which includes a second hotel for Kimpton outside the Americas, in Paris. We enhanced our loyalty proposition, continued to develop our technological capabilities and grew our digital channels, supporting our unique owner proposition. We have also remained focused on innovating and evolving our brand portfolio, which
includes launching the latest phase of the Crowne Plaza refresh in the US.
The fundamentals for our industry, and particularly for IHG as one of the largest branded players, remain compelling. This backdrop, combined with our winning strategy and the strength of our business model, will enable us to deliver sustainable growth into the future. Despite the uncertain environment in some markets, we remain confident in the outlook for the remainder
of the year.”
|
Financial Highlights |
● Solid revenue growth driven by both RevPAR and rooms
Global comparable H1 RevPAR of 2.0%, led by rate up 1.4%. Q2 RevPAR up 2.5%, with growth in all regions.
3.6% net room growth year on year, with 17k room openings, up 8% year on year (with Q2 up over 40%).
$11.9bn total gross revenue from hotels in IHG’s system (up 1.7% year on year; up 4.0% CER).
● High-quality business model, focused on disciplined execution, capital allocation and shareholder returns
Group fee margin of 48.6%, up 2.9%pts (up 2.6%pts CER), aided by favourable phasing of costs along with scale benefits and continued focus on tight overhead control.
Focused investment and asset recycling led to net capital expenditure of $83m (gross: $108m).
$1.5bn returned to shareholders in May via a $6.329 per share special dividend with 5 for 6 share consolidation.
9.1% increase in interim dividend to 30.0¢. |
Strategic Progress |
● Strengthening our portfolio of preferred brands
Highest signings for InterContinental since 2008, further expanding the world’s largest luxury hotel brand.
Growing our boutique footprint, with the signing of our second Kimpton outside the Americas in Paris, and the opening of the second Hotel Indigo in our AMEA region, in Singapore.
Continued momentum for our new brands, with an additional signing for HUALUXE, taking the pipeline to 21 hotels. In July we opened our fourth EVEN Hotel, an owned property in Brooklyn, New York.
Next phase of Crowne Plaza refresh announced in the US, supported by $200m investment over 3 years (~$100m system funded, ~$100m within existing capex guidance).
Continued roll-out of both our Formula Blue room design for Holiday Inn Express in the Americas, and our innovative Open Lobby solution for Holiday Inn in Europe and the Americas. |
● Strong pipeline driving momentum and supporting future growth
Signed 35k rooms into the pipeline, taking it to 222k rooms.
45% of the pipeline is under construction and 90% is in our ten priority markets.
13% share of the active industry pipeline, around three times current supply share, reflecting our strong growth position. |
● Driving revenue through digital capabilities and loyalty proposition
Digital revenue up over 7% year on year; within this, mobile revenue up 32% year on year with mobile now driving more traffic to our websites than desktop.
Global roll out of ‘Your Rate by IHG Rewards Club’ announced, helping drive a 20% YTD increase in IHG Rewards Club enrolments and an increase in point redemptions of almost one third.
Innovative cloud-based Guest Reservation System on track for pilot and phased rollout starting in 2017. |
Americas – Strong fee revenue growth |
Comparable RevPAR increased 2.4% (Q2: up 2.8%), driven by 2.2% rate growth. US RevPAR grew 2.1%, with 2.6% in Q2. This overall figure was impacted by our concentration in oil-producing markets, where RevPAR was down 6.3% in Q2; the remainder of the estate grew 3.7%.
On an underlying1 basis revenue was up 7% and operating profit up 9%, driven by good growth in both franchised and managed fees, aided by favourable cost phasing in the franchised business and a $4m year on year saving on US healthcare costs. This was partially offset by $4m of previously disclosed costs incurred
ahead of the re-opening of InterContinental New York Barclay in April, which is already positioning itself as one of the premier hotels in its market, and is commanding 35% higher rates than pre-refurbishment. Underlying1 owned revenue was up 5% ($3m) and underlying operating profit flat, with good RevPAR growth offset by phasing of costs at one hotel. Reported revenue grew by 4% (5% CER) and profits increased 6% (7% CER), negatively impacted by the previously
reported $3m of liquidated damages received in 2015.
We opened 13k rooms (95 hotels), our fastest pace in 5 years, including 6 Holiday Inn Club Vacations properties (2k rooms). 10k rooms (64 hotels) were removed as we continue to focus on high quality brand representation. We signed 20k rooms, including more than 100 Holiday Inn Brand Family hotels in the US.
H2 2016:
As previously disclosed, to drive growth across our brand portfolio, we are investing $7m into permanent franchise development resources; with $4m now expected in H2, with a further $3m annualisation in 2017. $2m of the $6m that we expected to incur as reopening costs for InterContinental New York Barclay will now be in H2. We expect $5m of favourable phasing
of franchise costs in H1 to reverse in H2.
|
Europe – Best signings performance since 2008 |
Comparable RevPAR increased by 2.0% (Q2: up 2.6%), driven by rate up 1.6%. UK RevPAR increased by 1.4%, led by strong trading in the provinces. In Germany, 8.7% RevPAR growth was driven by a particularly favourable trade fair calendar in Q2. Challenging trading conditions in Paris persist, with a 19.5% RevPAR decline partially offset by strong growth in the French provinces.
On an underlying1 basis revenue was down 5% and operating profit down 3%. Performance across much of the estate was good, this was offset by a $2m revenue reduction in relation to three managed hotels; two of which have exited the system and one of which is undergoing a major refurbishment. Reported revenue declined
24% (22% CER) and reported operating profit was down 6% (3% CER). This was impacted by the sale of InterContinental Paris – Le Grand on 20 May 2015, but had some benefit from favourable phasing of regional overheads.
Opened 1k rooms (3 hotels) and signed 4k rooms (24 hotels), the latter being our best performance for the half since 2008. This included the 694 room Holiday Inn London – Kensington and the 51 room InterContinental Venice – Palazzo Nani in Italy.
|
AMEA – Strong trading in key markets offset by weakness in the Middle East |
Comparable RevPAR decreased 0.4% (Q2: up 0.4%). Performance outside the Middle East continued to be strong, with 4.3% RevPAR growth overall. India was up 10.5%, Japan and Australia up mid-single digits and South-East Asia up low-single digits. In the Middle East RevPAR was down 8.0% due to the ongoing impact of low oil prices. An increasing mix of new rooms opening in
developing markets meant that total RevPAR was down 1.8% in the half.
On an underlying1 basis, revenue was down 2% and operating profit down 5%. Good underlying growth in our managed business was offset by a $4m revenue reduction in relation to four hotels; three long standing contracts being renewed onto standard market terms and one equity stake disposal. Reported revenue declined 1%
(down 1% CER) and operating profit 3% (down 3% CER).
We opened 2k rooms (8 hotels), including our first Holiday Inn Express in Australia, driving net system growth of nearly 8% year on year (including almost 3k rooms in Makkah with low annual fee contribution due to the highly seasonal demand nature of this market). We signed 3k rooms (11 hotels) including our first hotel in Myanmar, the 500-room Holiday Inn Yangon Pyay
Road.
H2 2016:
There will be a further $3m revenue reduction in H2 in relation to the three contract renewals and one equity stake disposal.
|
1Excluding owned asset disposals, managed leases, significant liquidated damages at constant FY15 exchange rates (CER)
|
Greater China – Solid mainland trading and double digit system growth drive strong profit increases |
Comparable RevPAR increased 2.4% (Q2: up 2.5%), with growth of 4.7% in mainland China offset by continued declines in Hong Kong and Macau. Mainland tier 1 cities continued to trade particularly well, with RevPAR up 6.6%, driven by strong performance in Beijing and Shanghai. Our strategy to maximise our long term growth potential by using our mainstream brands to penetrate
less developed cities impacted total RevPAR, which was down 2.7% for the region.
Underlying1 revenue was up 14% and profit up 38% driven by strong trading in mainland China, double-digit year on year net system growth and $3m managed fee contribution from InterContinental Hong Kong which was sold on 31 October 2015. Reported revenue and operating profit declined by 53% (51% CER) and 41% (35%
CER) respectively, impacted by the sale of the InterContinental Hong Kong.
We opened 2k rooms (6 hotels), including two InterContinental hotels in Wuhan and Nantong, taking the portfolio for the brand to 15k rooms (36 hotels) in the region. We signed 8k rooms (33 hotels), including our first two franchised Holiday Inn Express properties, in Shanghai and Qidong.
|
Highly cash generative business with disciplined approach to capital allocation |
● Significant free cash flow from operations
Free cash flow of $336m for the half, up 151% year on year (H1 2015: $134m), includes
cash receipts on behalf of the system fund of ~$95m from renegotiation of long-term partnership agreements and the benefit of favourable phasing of tax payments compared to prior year. |
● Investing for growth
Third owned EVEN Hotel opened in Brooklyn in July; seven further EVEN Hotels in pipeline, all asset light.
InterContinental New York Barclay (in which IHG has a 20% JV stake) re-opened in late April after its major refurbishment.
$108m gross capital expenditure in first half: $36m maintenance capex and key money; $25m recyclable investments; and $47m system funded capital investments. $11m proceeds received from asset recycling and $14m system
fund depreciation received via working capital, resulting in $83m of net capital expenditure.
Gross capex guidance remains unchanged at up to $350m p.a. into the medium term. |
● Shareholder returns
9.1% increase in the interim dividend to 30.0¢.
$1.5bn returned to shareholders in May via a $6.329 per share special dividend with 5 for 6 share consolidation. |
● Efficient balance sheet provides flexibility
Financial position remains robust, with an on-going commitment to an efficient balance sheet and investment grade credit rating.
Net debt at end of first half of $1,829m (including $224m finance lease on InterContinental Boston), up $1.3bn on the 2015 close following the payment of the $1.5bn special dividend in May. Net debt to EBITDA now stands at 2.3x (LTM).
|
Foreign exchange – stronger US dollar impacts reported profit |
The stronger US dollar in H1 reduced group RevPAR to 0.2% when reported at actual rates, and negatively impacted reported profit by $4m. Europe and Greater China were most affected, with foreign exchange reducing RevPAR growth by around 4%pts in each region. A full breakdown of constant currency vs. actual currency RevPAR by region is set out in Appendix 2.
Currency markets continue to be volatile and we expect foreign exchange to have an impact on 2016 reported profit. If 30 June 2016 spot exchange rates had existed throughout H2 2015, reported operating profit for that period would have been $6m higher.
Note that whilst the UK comprises around 5% of our group revenues, approximately 50% of our gross central overhead and 40% of Europe regional overhead are in sterling. At 30 June 2016 exchange rates, approximately 70% of our debt is denominated in sterling. |
Interest, tax, and exceptional items |
Interest: Net financial expenses reduced by $2m to $41m due to high levels of cash ahead of payment of the $1.5bn special dividend on 23 May 2016.
|
Tax: Based on the position at the end of the half, the tax charge has been calculated using an interim effective tax rate of 33% (2015: 30%). We continue to expect the full year 2016 tax rate to be in the low 30s.
|
Exceptional operating items: Net exceptional loss of $5m for the half related to the Kimpton integration.
|
Appendix 1: Comparable RevPAR Movement Summary
| ||||||
|
Half Year 2016
|
Q2 2016
| ||||
RevPAR
|
Rate
|
Occ.
|
RevPAR
|
Rate
|
Occ.
| |
Group
|
2.0% |
1.4% |
0.4pts |
2.5% |
1.7% |
0.5pts |
Americas
|
2.4% |
2.2% |
0.1pts |
2.8% |
2.1% |
0.5pts |
Europe
|
2.0% |
1.6% |
0.3pts |
2.6% |
2.5% |
0.1pts |
AMEA
|
(0.4)% |
0.0% |
(0.3)pts |
0.4% |
2.1% |
(1.1)pts |
G. China
|
2.4% |
(2.7)% |
3.0pts |
2.5% |
(2.2)% |
3.0pts |
Appendix 2: RevPAR movement summary at constant exchange rates (CER) vs. actual exchange rates (AER) |
| ||||||
|
Half Year 2016
|
Q2 2016
| |||||
CER
|
AER
|
Difference
|
CER
|
AER
|
Difference
| ||
Group
|
2.0% |
0.2% |
1.8%pts |
2.5% |
1.0% |
1.4%pts | |
Americas
|
2.4% |
1.4% |
1.0%pts |
2.8% |
1.9% |
0.9%pts | |
Europe
|
2.0% |
(1.7)% |
3.7%pts |
2.6% |
(0.5)% |
3.1%pts | |
AMEA
|
(0.4)% |
(2.4)% |
2.0%pts |
0.4% |
0.0% |
0.4%pts | |
G. China
|
2.4% |
(1.7)% |
4.1%pts |
2.5% |
(1.8)% |
4.3%pts |
Appendix 3: Half Year System & Pipeline Summary (rooms) |
| ||||||
|
System
|
Pipeline
| |||||
Openings
|
Removals
|
Net
|
Total
|
YoY%*
|
Signings
|
Total
| |
Group
|
17,436
|
(12,083)
|
5,353
|
749,721
|
3.6%
|
34,512
|
222,233
|
Americas
|
12,843
|
(10,010)
|
2,833
|
482,408
|
1.7%
|
20,039
|
99,450
|
Europe
|
640
|
(777)
|
(137)
|
106,574
|
2.8%
|
3,744
|
23,398
|
AMEA
|
1,854
|
(1,018)
|
836
|
73,409
|
7.8%
|
2,659
|
37,200
|
G. China
|
2,099
|
(278)
|
1,821
|
87,330
|
12.1%
|
8,070
|
62,185
|
Appendix 4: Half Year financial headlines |
| |||||||||||
Operating Profit $m
|
Total
|
Americas
|
Europe
|
AMEA
|
G. China
|
Central
| ||||||
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
|
2016
|
2015
| |
Franchised
|
340 |
324 |
295 |
279 |
37 |
37 |
6 |
6 |
2 |
2 |
-
|
-
|
Managed
|
113 |
116 |
32 |
36 |
10 |
13 |
42 |
42 |
29 |
25 |
-
|
-
|
Owned & leased
|
13 |
32 |
12 |
12 |
- |
1 |
1 |
1 |
- |
18 |
-
|
-
|
Regional overheads
|
(60) |
(67) |
(26) |
(32) |
(13) |
(15) |
(10) |
(9) |
(11) |
(11) |
-
|
-
|
Profit pre central overheads
|
406 |
405 |
313 |
295 |
34 |
36 |
39 |
40 |
20 |
34 |
- |
-
|
Central overheads
|
(62) |
(68) |
- |
- |
- |
- |
- |
- |
- |
- |
(62)
|
(68)
|
Group Operating profit
|
344 |
337 |
313 |
295 |
34 |
36 |
39 |
40 |
20 |
34 |
(62)
|
(68)
|
|
Total***
|
Americas
|
Europe
|
AMEA
|
G. China
|
| |||||||||||||
Reported
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
| ||||||||
Growth/ (decline)
|
2%
|
3%
|
6%
|
7%
|
(6)%
|
(3)%
|
(3)%
|
(3)%
|
(41)%
|
(35)%
|
| ||||||||
|
|
|
|
|
|
|
| ||||||||||||
Underlying****
Growth/ (decline)
|
Total***
|
Americas
|
Europe
|
AMEA
|
G. China
|
| |||||||||||||
10%
|
9%
|
(3)%
|
(5)%
|
38%
|
| ||||||||||||||
Exchange rates: |
GBP:USD |
EUR:USD |
* US dollar actual currency |
|
|
|
|
| |||||||||||
2016 |
0.70 |
0.90 |
** Translated at constant 2015 exchange rates |
|
|
|
|
| |||||||||||
2015 |
0.66 |
0.90 |
*** After central overheads |
|
|
|
|
| |||||||||||
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**** At CER and excluding: owned asset disposals, results from managed lease hotels and significant liquidated damages (see below for definitions)
|
Appendix 6: Definitions
|
CER: constant exchange rates with H1 2015 exchange rates applied to H1 2016.
Comparable RevPAR: Revenue per available room for hotels that have traded for all of 2015 and 2016, reported at CER.
Fee revenue: Group revenue excluding owned and leased hotels, managed leases and significant liquidated damages.
Fee margin: adjusted for owned and leased hotels, managed leases and significant liquidated damages.
Managed lease hotels: properties structured for legal reasons as operating leases but with the same characteristics as management contracts
Americas: Revenue H1 2016 $20m; H1 2015 $22m; EBIT H1 2016 $1m, H1 2015 $2m. Europe: Revenue H1 2016 $38m; H1 2015 $36m; EBIT H1 2016 $1m, H1 2015 $(1m). AMEA: Revenue H1 2016 $24m; H1 2015 $21m; EBIT H1 2016 $2m, H1 2015 $1m.
Owned asset disposals: InterContinental Hong Kong was sold on 30 September 2015 (H1 2015: $67m revenue and $18m EBIT), InterContinental Paris – Le Grand was sold on 20 May 2015 (H1 2015: $30m revenue and $1m EBIT).
Significant liquidated damages: $nil in H1 2016; $3m in H1 2015 ($3m Americas managed in Q2).
Total gross revenue: total rooms revenue from franchised hotels and total hotel revenue from managed, owned and leased hotels. Other than owned and leased hotels, it is not revenue attributable to IHG, as it is derived mainly from hotels owned by third parties.
Total RevPAR: Revenue per available room including hotels that have opened or exited in either 2015 or 2016, reported at CER.
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Appendix 7: Investor information for 2016 interim dividend
| |||||
Ex-dividend date:
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1 September 2016
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Record date:
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2 September 2016
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Payment date:
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7 October 2016
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Dividend payment:
|
ADRs: 30.0 cents per ADR; Ordinary shares: 22.6 pence per share.
|
For further information, please contact: | ||
Investor Relations (Catherine Dolton; Adam Smith):
|
+44 (0)1895 512 176
|
+44 (0)7808 098 724
|
Media Relations (Yasmin Diamond; Zoë Bird):
|
+44 (0)1895 512 008
|
+44 (0)7736 746 167
|
|
|
|
Webcast for Analysts and Shareholders:
A conference call and webcast presented by Richard Solomons, Chief Executive Officer and Paul Edgecliffe-Johnson, Chief Financial Officer will commence at 9:30am London time on 2nd August on the web address www.ihgplc.com/interims16. For those wishing to ask questions please use
the dial in details below which will have a Q&A facility.
The webcast replay will be available on the website later on the day of the results and will remain on it for the foreseeable future.
| ||
UK toll:
UK toll free:
US toll:
Passcode:
|
+44 (0)20 3003 2666
0808 109 0700
+1 212 999 6659
IHG Investor
| |
A replay of the conference call will also be available following the event – details are below.
| ||
Replay:
Pin:
|
+44 (0)20 8196 1998
3565972#
| |
US conference call and Q&A:
An additional conference call, primarily for US investors and analysts, at 9:00am New York Time on 2nd August. There will be an opportunity to ask questions.
| ||
UK toll:
US toll:
US toll free:
Passcode:
|
+44 (0)20 3003 2666
+1 212 999 6659
+1 866 966 5335
IHG Investor
| |
A replay of the conference call will also be available following the event – details are below.
| ||
Replay:
Pin:
|
+44 (0)20 8196 1998
5519478#
| |
Website:
The full release and supplementary data will be available on our website from 7:00am (London time) on 2nd August. The web address is www.ihgplc.com/interims16
|
Notes to Editors:
IHG® (InterContinental Hotels Group) ]LON:IHG, NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of hotel brands, including InterContinental® Hotels & Resorts, Kimpton® Hotels & Restaurants, HUALUXE™
Hotels and Resorts, Crowne Plaza® Hotels & Resorts, Hotel Indigo®, EVEN® Hotels, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Staybridge Suites® and Candlewood Suites®.
IHG franchises, leases, manages or owns more than 5,000 hotels and nearly 750,000 guest rooms in almost 100 countries, with more than 1,400 hotels in its development pipeline. IHG also manages IHG® Rewards Club, the world’s first and largest hotel loyalty programme, with more than 96 million members worldwide.
InterContinental Hotels Group PLC is the Group’s holding company and is incorporated in Great Britain and registered in England and Wales. More than 350,000 people work across IHG’s hotels and corporate offices globally.
Visit www.ihg.com for hotel information and reservations and www.ihgrewardsclub.com for more on IHG Rewards Club. For our latest news, visit: www.ihg.com/media and follow us on social media at: www.twitter.com/ihg, www.facebook.com/ihg and www.youtube.com/ihgplc.
|
Cautionary note regarding forward-looking statements:
This announcement contains certain forward-looking statements as defined under United States law (Section 21E of the Securities Exchange Act of 1934) and otherwise. These forward-looking statements can be identified by the fact that they do not relate only 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. These statements are based on assumptions and assessments made by InterContinental Hotels Group PLC’s management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. 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. The main factors that could affect the business and the financial results are described in the ‘Risk Factors’ section in the current InterContinental Hotels Group PLC’s Annual report and Form 20-F filed with the United States Securities and Exchange Commission.
|
|
6 months ended 30 June | |||
Group results |
2016 |
2015 |
% | |
|
$m |
$m |
change | |
Revenue |
|
|
| |
|
Americas |
490 |
471 |
4.0 |
|
Europe |
109 |
144 |
(24.3) |
|
AMEA |
115 |
116 |
(0.9) |
|
Greater China |
55 |
118 |
(53.4) |
|
Central |
69 |
66 |
4.5 |
|
|
____ |
____ |
____ |
Total |
838 |
915 |
(8.4) | |
|
____ |
____ |
____ | |
Operating profit |
|
|
| |
|
Americas |
313 |
295 |
6.1 |
|
Europe |
34 |
36 |
(5.6) |
|
AMEA |
39 |
40 |
(2.5) |
|
Greater China |
20 |
34 |
(41.2) |
|
Central |
(62) |
(68) |
8.8 |
|
|
____ |
____ |
____ |
Operating profit before exceptional items |
344 |
337 |
2.1 | |
Exceptional operating items |
(5) |
164 |
(103.0) | |
|
____ |
____ |
____ | |
|
339 |
501 |
(32.3) | |
Net financial expenses |
(41) |
(43) |
4.7 | |
|
____ |
____ |
____ | |
Profit before tax |
298 |
458 |
(34.9) | |
|
____ |
____ |
____ | |
Earnings per ordinary share |
|
|
| |
|
Basic |
87.7¢ |
156.2¢ |
(43.9) |
|
Adjusted |
89.0¢ |
87.2¢ |
2.1 |
|
|
|
|
|
Average US dollar to sterling exchange rate |
$1 : £0.70 |
$1 : £0.66 |
6.1 |
|
Hotels |
Rooms | |||
Global hotel and room count |
|
Change over |
|
Change over | |
|
2016
30 June |
2015
31 December |
2016
30 June |
2015
31 December | |
Analysed by brand |
|
|
|
| |
|
InterContinental |
183 |
(1) |
62,406 |
366 |
|
Kimpton |
62 |
1 |
11,076 |
100 |
|
HUALUXE |
3 |
- |
798 |
- |
|
Crowne Plaza |
405 |
(1) |
112,647 |
(637) |
|
Hotel Indigo |
70 |
5 |
8,407 |
743 |
|
EVEN Hotels |
3 |
- |
446 |
- |
|
Holiday Inn1 |
1,220 |
(6) |
228,235 |
135 |
|
Holiday Inn Express |
2,456 |
31 |
241,061 |
4,655 |
|
Staybridge Suites |
226 |
6 |
24,582 |
618 |
|
Candlewood Suites |
347 |
6 |
32,813 |
485 |
|
Other |
95 |
(3) |
27,250 |
(1,112) |
|
|
____ |
____ |
______ |
_____ |
Total |
5,070 |
38 |
749,721 |
5,353 | |
|
|
____ |
____ |
______ |
_____ |
Analysed by ownership type |
|
|
|
| |
|
Franchised |
4,243 |
24 |
533,329 |
2,581 |
|
Managed |
820 |
14 |
214,182 |
2,779 |
|
Owned and leased |
7 |
- |
2,210 |
(7) |
|
|
____ |
____ |
______ |
_____ |
Total |
5,070 |
38 |
749,721 |
5,353 | |
|
|
____ |
____ |
______ |
_____ |
|
Hotels |
Rooms | ||||||
Global pipeline |
|
Change over |
|
Change over | ||||
|
|
2016
30 June |
2015
31 December |
2016
30 June |
2015
31 December | |||
Analysed by brand |
|
|
|
| ||||
|
InterContinental |
57 |
5 |
16,307 |
631 | |||
|
Kimpton |
16 |
(2) |
3,128 |
(238) | |||
|
HUALUXE |
21 |
- |
6,657 |
25 | |||
|
Crowne Plaza |
87 |
3 |
23,930 |
749 | |||
|
Hotel Indigo |
63 |
- |
8,929 |
(279) | |||
|
EVEN Hotels |
8 |
- |
1,262 |
- | |||
|
Holiday Inn1 |
260 |
4 |
52,477 |
273 | |||
|
Holiday Inn Express |
651 |
49 |
80,928 |
5,323 | |||
|
Staybridge Suites |
128 |
14 |
14,103 |
1,462 | |||
|
Candlewood Suites |
103 |
5 |
9,215 |
495 | |||
|
Other |
13 |
(1) |
5,297 |
(124) | |||
|
|
____ |
____ |
______ |
_____ | |||
Total |
1,407 |
77 |
222,233 |
8,317 | ||||
|
|
____ |
____ |
______ |
_____ | |||
Analysed by ownership type |
|
|
|
| ||||
|
Franchised |
979 |
74 |
109,205 |
7,036 | |||
|
Managed |
427 |
3 |
112,826 |
1,281 | |||
|
Owned and Leased |
1 |
- |
202 |
- | |||
|
|
____ |
____ |
______ |
_____ | |||
Total |
1,407 |
77 |
222,233 |
8,317 | ||||
|
|
____ |
____ |
______ |
_____ |
|
6 months ended 30 June | ||||
Americas Results |
2016 |
2015 |
% | ||
|
$m |
$m |
change | ||
Revenue |
|
|
| ||
|
Franchised |
338 |
323 |
4.6 | |
|
Managed |
86 |
85 |
1.2 | |
|
Owned and leased |
66 |
63 |
4.8 | |
|
____ |
____ |
____ | ||
Total |
|
490 |
471 |
4.0 | |
|
____ |
____ |
____ | ||
Operating profit before exceptional items |
|
|
| ||
|
Franchised |
295 |
279 |
5.7 | |
|
Managed |
32 |
36 |
(11.1) | |
|
Owned and leased |
12 |
12 |
- | |
|
|
____ |
____ |
____ | |
|
339 |
327 |
3.7 | ||
Regional overheads |
(26) |
(32) |
18.8 | ||
|
____ |
____ |
____ | ||
Total |
|
313 |
295 |
6.1 | |
|
____ |
____ |
____ |
Americas Comparable RevPAR movement on previous year |
6 months ended
30 June 2016 | |
Franchised |
| |
|
Crowne Plaza |
1.7% |
|
Hotel Indigo |
1.5% |
|
Holiday Inn |
2.8% |
|
Holiday Inn Express |
2.0% |
|
All brands |
2.2% |
Managed |
| |
|
InterContinental |
4.4% |
|
Kimpton |
2.5% |
|
Crowne Plaza |
4.1% |
|
Holiday Inn |
6.1% |
|
Staybridge Suites |
5.2% |
|
Candlewood Suites |
1.9% |
|
All brands |
3.5% |
Owned and leased |
| |
|
All brands |
4.0% |
|
Hotels |
Rooms | |||
Americas hotel and room count |
|
Change over |
|
Change over | |
|
2016
30 June |
2015
31 December |
2016
30 June |
2015
31 December | |
Analysed by brand |
|
|
|
| |
|
InterContinental |
48 |
(2) |
16,501 |
(608) |
|
Kimpton |
62 |
1 |
11,076 |
100 |
|
Crowne Plaza |
170 |
(2) |
45,299 |
(1,017) |
|
Hotel Indigo |
44 |
4 |
5,683 |
612 |
|
EVEN Hotels |
3 |
- |
446 |
- |
|
Holiday Inn1 |
766 |
(6) |
136,313 |
318 |
|
Holiday Inn Express |
2,130 |
24 |
189,845 |
2,873 |
|
Staybridge Suites |
217 |
6 |
23,280 |
618 |
|
Candlewood Suites |
347 |
6 |
32,813 |
485 |
|
Other |
84 |
- |
21,152 |
(548) |
|
____ |
____ |
______ |
_____ | |
Total |
3,871 |
31 |
482,408 |
2,833 | |
|
____ |
____ |
______ |
_____ | |
Analysed by ownership type |
|
|
|
| |
|
Franchised |
3,576 |
28 |
425,030 |
2,800 |
|
Managed |
290 |
3 |
55,755 |
40 |
|
Owned and leased |
5 |
- |
1,623 |
(7) |
|
____ |
____ |
______ |
_____ | |
Total |
3,871 |
31 |
482,408 |
2,833 | |
|
____ |
____ |
______ |
_____ |
|
Hotels |
Rooms | |||
Americas pipeline |
|
Change over |
|
Change over | |
|
2016
30 June |
2015
31 December |
2016
30 June |
2015
31 December | |
Analysed by brand |
|
|
|
| |
|
InterContinental |
6 |
2 |
2,125 |
580 |
|
Kimpton |
16 |
(2) |
3,128 |
(238) |
|
Crowne Plaza |
13 |
(2) |
2,441 |
(49) |
|
Hotel Indigo |
28 |
(2) |
3,545 |
(479) |
|
EVEN Hotels |
8 |
- |
1,262 |
- |
|
Holiday Inn1 |
126 |
1 |
16,922 |
(1,281) |
|
Holiday Inn Express |
480 |
31 |
46,502 |
2,557 |
|
Staybridge Suites |
120 |
15 |
12,804 |
1,574 |
|
Candlewood Suites |
103 |
5 |
9,215 |
495 |
|
Other |
12 |
(1) |
1,506 |
(93) |
|
____ |
____ |
______ |
_____ | |
Total |
912 |
47 |
99,450 |
3,066 | |
|
____ |
____ |
______ |
_____ | |
Analysed by ownership type |
|
|
|
| |
|
Franchised |
863 |
54 |
89,906 |
4,043 |
|
Managed |
48 |
(7) |
9,342 |
(977) |
|
Owned and Leased |
1 |
- |
202 |
- |
|
____ |
____ |
______ |
_____ | |
Total |
912 |
47 |
99,450 |
3,066 | |
|
____ |
____ |
______ |
_____ |
|
6 months ended 30 June | ||||
Europe results |
2016 |
2015 |
% | ||
|
$m |
$m |
change | ||
Revenue |
|
|
| ||
|
Franchised |
49 |
50 |
(2.0) | |
|
Managed |
60 |
64 |
(6.3) | |
|
Owned and leased |
- |
30 |
(100.0) | |
|
____ |
____ |
____ | ||
Total |
|
109 |
144 |
(24.3) | |
|
____ |
____ |
____ | ||
Operating profit before exceptional items |
|
|
| ||
|
Franchised |
37 |
37 |
- | |
|
Managed |
10 |
13 |
(23.1) | |
|
Owned and leased |
- |
1 |
(100.0) | |
|
|
____ |
____ |
____ | |
|
47 |
51 |
(7.8) | ||
Regional overheads |
(13) |
(15) |
13.3 | ||
|
____ |
____ |
____ | ||
Total |
|
34 |
36 |
(5.6) | |
|
____ |
____ |
____ |
Europe comparable RevPAR movement on previous year |
6 months ended
30 June
2016 | |||
|
| |||
Franchised |
| |||
|
All brands |
2.3% | ||
|
|
| ||
Managed |
| |||
|
All brands |
0.1% |
|
Hotels |
Rooms | |||
Europe hotel and room count |
|
Change over |
|
Change over | |
|
2016
30 June |
2015
31 December |
2016
30 June |
2015
31 December | |
Analysed by brand |
|
|
|
| |
|
InterContinental |
31 |
(1) |
9,694 |
(192) |
|
Crowne Plaza |
88 |
- |
20,270 |
1 |
|
Hotel Indigo |
19 |
- |
1,790 |
- |
|
Holiday Inn1 |
284 |
(1) |
46,219 |
69 |
|
Holiday Inn Express |
228 |
- |
27,583 |
58 |
|
Staybridge Suites |
6 |
- |
877 |
- |
|
Other |
1 |
(1) |
141 |
(73) |
|
____ |
____ |
______ |
_____ | |
Total |
657 |
(3) |
106,574 |
(137) | |
|
____ |
____ |
______ |
_____ | |
Analysed by ownership type |
|
|
|
| |
|
Franchised |
611 |
(4) |
94,182 |
(228) |
|
Managed |
46 |
1 |
12,392 |
91 |
|
____ |
____ |
______ |
_____ | |
Total |
657 |
(3) |
106,574 |
(137) | |
|
____ |
____ |
______ |
_____ |
|
Hotels |
Rooms | |||
Europe pipeline |
|
Change over |
|
Change over | |
|
2016
30 June |
2015
31 December |
2016
30 June |
2015
31 December | |
Analysed by brand |
|
|
|
| |
|
InterContinental |
6 |
1 |
933 |
51 |
|
Crowne Plaza |
15 |
4 |
3,198 |
525 |
|
Hotel Indigo |
14 |
3 |
1,758 |
355 |
|
Holiday Inn |
39 |
2 |
8,463 |
629 |
|
Holiday Inn Express |
54 |
9 |
8,535 |
1,337 |
|
Staybridge Suites |
4 |
0 |
511 |
- |
|
Other |
- |
- |
- |
(31) |
|
____ |
____ |
______ |
_____ | |
Total |
132 |
19 |
23,398 |
2,866 | |
|
____ |
____ |
______ |
_____ | |
Analysed by ownership type |
|
|
|
| |
|
Franchised |
106 |
18 |
16,860 |
2,733 |
|
Managed |
26 |
1 |
6,538 |
133 |
|
____ |
____ |
______ |
_____ | |
Total |
132 |
19 |
23,398 |
2,866 | |
|
____ |
____ |
______ |
_____ |
|
6 months ended 30 June | ||||
AMEA results |
2016 |
2015 |
% | ||
|
$m |
$m |
change | ||
Revenue |
|
|
| ||
|
Franchised |
8 |
8 |
- | |
|
Managed |
90 |
91 |
(1.1) | |
|
Owned and leased |
17 |
17 |
- | |
|
|
____ |
____ |
_____ | |
Total |
|
115 |
116 |
(0.9) | |
|
____ |
____ |
____ | ||
Operating profit before exceptional items |
|
|
| ||
|
Franchised |
6 |
6 |
- | |
|
Managed |
42 |
42 |
- | |
|
Owned and leased |
1 |
1 |
- | |
|
|
____ |
____ |
_____ | |
|
49 |
49 |
- | ||
Regional overheads |
(10) |
(9) |
(11.1) | ||
|
____ |
____ |
____ | ||
Total |
|
39 |
40 |
(2.5) | |
|
____ |
____ |
_____ |
AMEA comparable RevPAR movement on previous year |
6 months ended
30 June
2016 | |
|
| |
Franchised |
| |
|
All brands |
(1.4)% |
Managed |
| |
|
All brands |
(0.2)% |
|
Hotels |
Rooms | |||
AMEA hotel and room count |
|
Change over |
|
Change over | |
|
2016
30 June |
2015
31 December |
2016
30 June |
2015
31 December | |
Analysed by brand |
|
|
|
| |
|
InterContinental |
68 |
- |
21,101 |
(137) |
|
Crowne Plaza |
71 |
- |
20,037 |
26 |
|
Hotel Indigo |
2 |
1 |
323 |
131 |
|
Holiday Inn1 |
90 |
(1) |
20,638 |
(346) |
|
Holiday Inn Express |
32 |
5 |
7,141 |
1,255 |
|
Staybridge Suites |
3 |
- |
425 |
- |
|
Other |
5 |
(1) |
3,744 |
(93) |
|
____ |
____ |
______ |
_____ | |
Total |
271 |
4 |
73,409 |
836 | |
|
____ |
____ |
______ |
_____ | |
Analysed by ownership type |
|
|
|
| |
|
Franchised |
52 |
- |
11,933 |
9 |
|
Managed |
217 |
4 |
60,889 |
827 |
|
Owned and leased |
2 |
- |
587 |
- |
|
____ |
____ |
______ |
_____ | |
Total |
271 |
4 |
73,409 |
836 | |
|
____ |
____ |
______ |
_____ |
|
Hotels |
Rooms | |||
AMEA pipeline |
|
Change over |
|
Change over | |
|
2016
30 June |
2015
31 December |
2016
30 June |
2015
31 December | |
Analysed by brand |
|
|
|
| |
|
InterContinental |
23 |
1 |
5,643 |
294 |
|
Crowne Plaza |
19 |
- |
5,112 |
(189) |
|
Hotel Indigo |
11 |
(2) |
2,049 |
(232) |
|
Holiday Inn1 |
44 |
(1) |
11,813 |
284 |
|
Holiday Inn Express |
40 |
(3) |
8,283 |
(1,061) |
|
Staybridge Suites |
4 |
(1) |
788 |
(112) |
|
Other |
- |
- |
3,512 |
- |
|
____ |
____ |
______ |
_____ | |
Total |
141 |
(6) |
37,200 |
(1,016) | |
|
____ |
____ |
______ |
_____ | |
Analysed by ownership type |
|
|
|
| |
|
Franchised |
8 |
- |
1,957 |
(222) |
|
Managed |
133 |
(6) |
35,243 |
(794) |
|
____ |
____ |
______ |
_____ | |
Total |
141 |
(6) |
37,200 |
(1,016) | |
|
____ |
____ |
______ |
_____ |
|
6 months ended 30 June | ||||
Greater China results |
2016 |
2015 |
% | ||
|
$m |
$m |
change | ||
Revenue |
|
|
| ||
|
Franchised |
2 |
2 |
- | |
|
Managed |
53 |
49 |
8.2 | |
|
Owned and leased |
- |
67 |
(100.0) | |
|
|
____ |
____ |
____ | |
Total |
|
55 |
118 |
(53.4) | |
|
____ |
____ |
____ | ||
Operating profit before exceptional items |
|
|
| ||
|
Franchised |
2 |
2 |
- | |
|
Managed |
29 |
25 |
16.0 | |
|
Owned and leased |
- |
18 |
(100.0) | |
|
|
____ |
____ |
____ | |
|
31 |
45 |
(31.1) | ||
Regional overheads |
(11) |
(11) |
- | ||
|
____ |
____ |
____ | ||
Total |
|
20 |
34 |
(41.2) | |
|
____ |
____ |
____ |
Greater China comparable RevPAR movement on previous year |
6 months ended
30 June
2016 | |
|
| |
Managed |
| |
|
All brands |
3.2% |
|
Hotels |
Rooms |
| |||
Greater China hotel and room count
|
2016 |
Change
over 2015 |
2016 |
Change
over 2015 | ||
|
30 June |
31 December |
30 June |
31 December | ||
Analysed by brand |
|
|
|
| ||
|
InterContinental |
36 |
2 |
15,110 |
1,303 | |
|
HUALUXE |
3 |
- |
798 |
- | |
|
Crowne Plaza |
76 |
1 |
27,041 |
353 | |
|
Hotel Indigo |
5 |
- |
611 |
- | |
|
Holiday Inn1 |
80 |
2 |
25,065 |
94 | |
|
Holiday Inn Express |
66 |
2 |
16,492 |
469 | |
|
Other |
5 |
(1) |
2,213 |
(398) | |
|
|
____ |
____ |
______ |
_____ | |
Total |
271 |
6 |
87,330 |
1,821 | ||
|
|
____ |
____ |
______ |
_____ | |
Analysed by ownership type |
|
|
|
| ||
|
Franchised |
4 |
- |
2,184 |
- | |
|
Managed |
267 |
6 |
85,146 |
1,821 | |
|
|
____ |
____ |
______ |
_____ | |
Total |
271 |
6 |
87,330 |
1,821 | ||
|
|
____ |
____ |
______ |
_____ |
|
Hotels |
Rooms |
| |||
Greater China pipeline
|
2016 |
Change
over 2015 |
2016 |
Change
over 2015 | ||
|
30 June |
31 December |
30 June |
31 December | ||
Analysed by brand |
|
|
|
| ||
|
InterContinental |
22 |
1 |
7,606 |
(294) | |
|
HUALUXE |
21 |
- |
6,657 |
25 | |
|
Crowne Plaza |
40 |
1 |
13,179 |
462 | |
|
Hotel Indigo |
10 |
1 |
1,577 |
77 | |
|
Holiday Inn1 |
51 |
2 |
15,279 |
641 | |
|
Holiday Inn Express |
77 |
12 |
17,608 |
2,490 | |
|
Other |
1 |
- |
279 |
- | |
|
|
____ |
____ |
______ |
_____ | |
Total |
222 |
17 |
62,185 |
3,401 | ||
|
|
____ |
____ |
______ |
_____ | |
Analysed by ownership type |
|
|
|
| ||
|
Franchised |
2 |
2 |
482 |
482 | |
|
Managed |
220 |
15 |
61,703 |
2,919 | |
|
|
____ |
____ |
______ |
_____ | |
Total |
222 |
17 |
62,185 |
3,401 | ||
|
|
____ |
____ |
______ |
_____ |
|
6 months ended 30 June | |||
|
2016 |
2015 |
% | |
Central results |
$m |
$m |
change | |
|
|
|
| |
Revenue |
69 |
66 |
4.5 | |
Gross central costs |
(131) |
(134) |
2.2 | |
|
____ |
____ |
____ | |
Net central costs |
|
(62) |
(68) |
8.8 |
|
____ |
____ |
____ |
|
● political and economic developments; |
|
● events that adversely impact domestic or international travel; |
|
● the hotel industry supply-and-demand cycle;
● a competitive and changing industry;
● executing and realising benefits from strategic transactions, including acquisitions;
● the dependency upon a wide range of external stakeholders and business partners;
● increasing competition from online travel agents and intermediaries; |
|
● identifying, securing and retaining franchise and management agreements; |
|
● changing technology and systems;
● the reliance on the reputation of its brands and is exposed to inherent risks;
● its intellectual property; |
|
● its reliance upon the resilience of its reservation system and other key technology platforms and is exposed to risks that could cause the failure of these systems;
● safety, security and crisis management; |
|
● requiring the right people, skills and capability to manage growth and change;
● its financial stability and ability to borrow and satisfy debt covenants;
● litigation;
● information security and data privacy; |
|
● compliance with existing and changing regulations across numerous countries, territories and jurisdictions; and |
|
● difficulties insuring its business. |
Underlying fee revenue is defined as Group revenue excluding revenue from owned and leased hotels, managed leases and significant liquidated damages, translated at constant currency by applying prior-year exchange rates.
2 Underlying operating profit excludes the impact of owned-asset disposals, significant liquidated damages and the results from managed-lease hotels, translated at constant currency by applying prior-year exchange rates. |
|
6 months ended 30 June 2016 |
6 months ended 30 June 2015
| ||||||||
|
Before
exceptional
items |
Exceptional
items
(note 4) |
Total |
Before
exceptional
items |
Exceptional
items
(note 4) |
Total | ||||
|
$m |
$m |
$m |
$m |
$m |
$m | ||||
Continuing operations |
|
|
|
|
|
| ||||
|
|
|
|
|
|
| ||||
Revenue (note 3) |
838 |
- |
838 |
915 |
- |
915 | ||||
Cost of sales |
(270) |
- |
(270) |
(344) |
- |
(344) | ||||
Administrative expenses |
(177) |
(5) |
(182) |
(188) |
(11) |
(199) | ||||
Share of losses of associates and joint ventures |
(2) |
- |
(2) |
(1) |
- |
(1) | ||||
Other operating income and expenses |
3 |
- |
3 |
4 |
175 |
179 | ||||
|
_____ |
____ |
____ |
_____ |
____ |
____ | ||||
|
392 |
(5) |
387 |
386 |
164 |
550 | ||||
|
|
|
|
|
|
| ||||
Depreciation and amortisation |
(48) |
- |
(48) |
(49) |
- |
(49) | ||||
|
_____ |
_____ |
_____ |
_____ |
____ |
____ | ||||
|
|
|
|
|
|
| ||||
Operating profit (note 3) |
344 |
(5) |
339 |
337 |
164 |
501 | ||||
Financial income |
4 |
- |
4 |
2 |
- |
2 | ||||
Financial expenses |
(45) |
- |
(45) |
(45) |
- |
(45) | ||||
|
_____ |
_____ |
_____ |
_____ |
____ |
____ | ||||
|
|
|
|
|
|
| ||||
Profit before tax |
303 |
(5) |
298 |
294 |
164 |
458 | ||||
|
|
|
|
|
|
| ||||
Tax (note 5) |
(99) |
2 |
(97) |
(88) |
(2) |
(90) | ||||
|
_____ |
_____ |
_____ |
_____ |
____ |
____ | ||||
Profit for the period from continuing operations |
204 |
(3) |
201 |
206 |
162 |
368 | ||||
|
_____ |
_____ |
_____ |
_____ |
_____ |
_____ | ||||
|
|
|
|
|
|
| ||||
Attributable to: |
|
|
|
|
|
| ||||
|
Equity holders of the parent |
203
|
(3) |
200 |
205 |
162 |
367 | |||
|
Non-controlling interest |
1 |
- |
1 |
1 |
- |
1 | |||
|
|
_____ |
_____ |
_____ |
____ |
____ |
____ | |||
|
|
204 |
(3) |
201 |
206 |
162 |
368 | |||
|
_____ |
_____ |
_____ |
_____ |
_____ |
_____ | ||||
|
|
|
|
|
|
| ||||
Earnings per ordinary share
(note 6) |
|
|
|
|
|
| ||||
Continuing and total operations: |
|
|
|
|
|
| ||||
|
Basic |
|
|
87.7¢ |
|
|
156.2¢ | |||
|
Diluted |
|
|
87.3¢ |
|
|
154.9¢ | |||
|
Adjusted |
89.0¢ |
|
|
87.2¢ |
|
| |||
|
Adjusted diluted |
88.6¢ |
|
|
86.5¢ |
|
| |||
|
_____ |
|
_____ |
_____ |
|
_____ | ||||
|
|
|
|
|
|
|
|
|
|
2016
6 months ended
30 June
$m |
2015
6 months ended
30 June
$m | |
|
|
| |
Profit for the period |
201 |
368 | |
|
|
| |
Other comprehensive income |
|
| |
|
|
| |
Items that may be subsequently reclassified to profit or loss: |
|
| |
|
(Losses)/gains on valuation of available-for-sale financial assets, net of related tax charge of $nil (2015 $nil) |
(3) |
4 |
|
Exchange gains/(losses) on retranslation of foreign operations, net of related tax charge of $2m (2015 credit of $3m) |
98 |
(5) |
|
Exchange losses reclassified to profit on hotel disposal |
- |
2 |
|
_____ |
_____ | |
|
95 |
1 | |
Items that will not be reclassified to profit or loss: |
|
| |
|
Re-measurement (losses)/gains on defined benefit plans, net of related tax credit of $3m (2015 charge of $4m) |
(11) |
8 |
|
_____ |
_____ | |
Total other comprehensive income for the period |
84 |
9 | |
|
_____ |
_____ | |
Total comprehensive income for the period |
285 |
377 | |
|
_____ |
_____ | |
Attributable to: |
|
| |
|
Equity holders of the parent |
282 |
376 |
|
Non-controlling interest |
3 |
1 |
|
_____ |
_____ | |
|
285 |
377 | |
|
_____ |
_____ |
|
|
|
6 months ended 30 June 2016
| ||||
|
Equity share capital |
Other reserves* |
Retained earnings |
Non-controlling interest |
Total equity |
|
$m |
$m |
$m |
$m |
$m |
|
|
|
|
|
|
At beginning of the period |
169 |
(2,513) |
2,653 |
10 |
319 |
|
|
|
|
|
|
Total comprehensive income for the period |
- |
93 |
189 |
3 |
285 |
Transfer of treasury shares to employee share trusts |
- |
(24) |
24 |
- |
- |
Purchase of own shares by employee share trusts |
- |
(10) |
- |
- |
(10) |
Release of own shares by employee share trusts |
- |
39 |
(39) |
- |
- |
Equity-settled share-based cost |
- |
- |
15 |
- |
15 |
Tax related to share schemes |
- |
- |
2 |
- |
2 |
Equity dividends paid |
- |
- |
(1,637) |
(5) |
(1,642) |
Transaction costs relating to shareholder returns |
- |
- |
(1) |
- |
(1) |
Exchange adjustments |
(15) |
15 |
- |
- |
- |
|
_____ |
______ |
_____ |
_____ |
_____ |
At end of the period |
154 |
(2,400) |
1,206 |
8 |
(1,032) |
|
_____ |
_____ |
_____ |
_____ |
_____ |
|
6 months ended 30 June 2015
| ||||
|
Equity share capital |
Other reserves* |
Retained earnings |
Non-controlling interest |
Total equity |
|
$m |
$m |
$m |
$m |
$m |
|
|
|
|
|
|
At beginning of the period |
178 |
(2,539) |
1,636 |
8 |
(717) |
|
|
|
|
|
|
Total comprehensive income for the period |
- |
1 |
375 |
1 |
377 |
Purchase of own shares by employee share trusts |
- |
(47) |
- |
- |
(47) |
Release of own shares by employee share trusts |
- |
62 |
(62) |
- |
- |
Equity-settled share-based cost |
- |
- |
14 |
- |
14 |
Tax related to share schemes |
- |
- |
3 |
- |
3 |
Equity dividends paid |
- |
- |
(125) |
- |
(125) |
Exchange adjustments |
1 |
(1) |
- |
- |
- |
|
_____ |
_____ |
_____ |
_____ |
_____ |
At end of the period |
179 |
(2,524) |
1,841 |
9 |
(495) |
|
_____ |
_____ |
_____ |
_____ |
_____ |
* |
Other reserves comprise the capital redemption reserve, shares held by employee share trusts, other reserves, unrealised gains and losses reserve and currency translation reserve. |
All items above are shown net of tax. |
|
2016
30 June |
2015
31 December |
|
$m |
$m |
ASSETS |
|
|
Property, plant and equipment |
425 |
428 |
Goodwill and other intangible assets |
1,251 |
1,226 |
Investment in associates and joint ventures |
136 |
136 |
Trade and other receivables |
- |
3 |
Other financial assets |
257 |
284 |
Non-current tax receivable |
37 |
37 |
Deferred tax assets |
46 |
49 |
|
_____ |
_____ |
Total non-current assets |
2,152 |
2,163 |
|
_____ |
_____ |
Inventories |
3 |
3 |
Trade and other receivables |
542 |
462 |
Current tax receivable |
6 |
4 |
Other financial assets |
10 |
- |
Cash and cash equivalents |
205 |
1,137 |
|
_____ |
_____ |
Total current assets |
766 |
1,606 |
|
_____ |
_____ |
Total assets (note 3) |
2,918 |
3,769 |
|
_____ |
_____ |
LIABILITIES |
|
|
Loans and other borrowings |
(475) |
(427) |
Derivative financial instruments |
- |
(3) |
Trade and other payables |
(585) |
(616) |
Loyalty programme liability |
(259) |
(223) |
Provisions |
(5) |
(15) |
Current tax payable |
(68) |
(85) |
|
_____ |
_____ |
Total current liabilities |
(1,392) |
(1,369) |
|
_____ |
_____ |
Loans and other borrowings |
(1,559) |
(1,239) |
Retirement benefit obligations |
(141) |
(129) |
Trade and other payables |
(208) |
(152) |
Loyalty programme liability |
(445) |
(426) |
Deferred tax liabilities |
(205) |
(135) |
|
_____ |
_____ |
Total non-current liabilities |
(2,558) |
(2,081) |
|
_____ |
_____ |
Total liabilities |
(3,950) |
(3,450) |
|
_____ |
_____ |
Net (liabilities)/assets |
(1,032) |
319 |
|
_____ |
_____ |
EQUITY |
|
|
Equity share capital |
154 |
169 |
Capital redemption reserve |
10 |
11 |
Shares held by employee share trusts |
(12) |
(18) |
Other reserves |
(2,873) |
(2,888) |
Unrealised gains and losses reserve |
110 |
113 |
Currency translation reserve |
365 |
269 |
Retained earnings |
1,206 |
2,653 |
|
_____ |
_____ |
IHG shareholders’ equity |
(1,040) |
309 |
Non-controlling interest |
8 |
10 |
|
_____ |
_____ |
Total equity |
(1,032) |
319 |
|
_____ |
_____ |
|
2016
6 months ended
30 June |
2015
6 months ended
30 June | |
|
$m |
$m | |
|
|
| |
Profit for the period |
201 |
368 | |
Adjustments reconciling profit for the period to cash flow from operations (note 8) |
221 |
(55) | |
|
_____ |
_____ | |
Cash flow from operations |
422 |
313 | |
Interest paid |
(12) |
(15) | |
Interest received |
4 |
1 | |
Tax paid on operating activities |
(32) |
(72) | |
|
_____ |
_____ | |
Net cash from operating activities |
382 |
227 | |
|
_____ |
_____ | |
Cash flow from investing activities |
|
| |
Purchase of property, plant and equipment |
(18) |
(27) | |
Purchase of intangible assets |
(69) |
(58) | |
Investment in other financial assets |
(10) |
(20) | |
Investment in associates and joint ventures |
(7) |
(16) | |
Loan advances to associates and joint ventures |
(1) |
(2) | |
Acquisition of business, net of cash acquired |
- |
(438) | |
Capitalised interest paid |
(3) |
(2) | |
Disposal of hotel assets, net of costs and cash disposed |
(4) |
363 | |
Proceeds from other financial assets |
13 |
6 | |
Capital returns from associates and joint ventures |
2 |
- | |
|
_____ |
_____ | |
Net cash from investing activities |
(97) |
(194) | |
|
_____ |
_____ | |
Cash flow from financing activities |
|
| |
Purchase of own shares by employee share trusts |
(10) |
(47) | |
Dividends paid to shareholders |
(1,637) |
(125) | |
Dividends paid to non-controlling interests |
(5) |
- | |
Transaction costs relating to shareholder returns |
(1) |
- | |
New borrowings |
- |
400 | |
Increase/(decrease) in other borrowings |
395 |
(208) | |
Proceeds from foreign exchange swaps |
- |
22 | |
|
_____ |
_____ | |
Net cash from financing activities |
(1,258) |
42 | |
|
_____ |
_____ | |
Net movement in cash and cash equivalents in the period |
(973) |
75 | |
|
|
| |
Cash and cash equivalents, net of overdrafts, at beginning of the period |
1,098 |
55 | |
Exchange rate effects |
(30) |
(31) | |
|
_____ |
_____ | |
Cash and cash equivalents, net of overdrafts, at end of the period |
95 |
99 | |
|
_____ |
_____ | |
|
|
1. |
Basis of preparation
|
|
These condensed interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority and IAS 34 ‘Interim Financial Reporting’. Other than the change noted below, they have been prepared on a consistent basis using the same accounting policies and methods
of computation set out in the InterContinental Hotels Group PLC (the Group or IHG) Annual Report and Form 20-F for the year ended 31 December 2015.
With effect from 1 January 2016, the Group has adopted Amendments to IAS 1 ‘Disclosure Initiative’ which has resulted in the reporting of the Group’s loyalty programme liability as a separate line item on the face of the Group statement of financial position.
The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, being a period of not less than 12 months from the date of this report. Accordingly, the condensed interim financial statements continue to be prepared on a going concern basis.
These condensed interim financial statements are unaudited and do not constitute statutory accounts of the Group within the meaning of Section 435 of the Companies Act 2006. The auditors have carried out a review of the financial information in accordance with the guidance contained in ISRE 2410 (UK and Ireland) ‘Review of Interim Financial Information
Performed by the Independent Auditor of the Entity’ issued by the Auditing Practices Board.
The financial information for the year ended 31 December 2015 has been extracted from the Group’s published financial statements for that year which were prepared in accordance with IFRSs as adopted by the European Union and which have been filed with the Registrar of Companies. The auditor’s report on those financial statements was unqualified
with no reference to matters to which the auditor drew attention by way of emphasis and no statement under s498(2) or s498(3) of the Companies Act 2006.
|
2. |
Exchange rates
|
|
The results of operations have been translated into US dollars at the average rates of exchange for the period. In the case of sterling, the translation rate is $1 = £0.70 (2015 $1 = £0.66). In the case of the euro, the translation rate is $1 = €0.90 (2015 $1 = €0.90).
Assets and liabilities have been translated into US dollars at the rates of exchange on the last day of the period. In the case of sterling, the translation rate is $1 = £0.74 (2015 30 June $1 = £0.64; 31 December $1 = £0.68). In the case of the euro, the translation rate is $1 = €0.90 (2015 30 June $1 = €0.89; 31 December $1 = €0.92).
|
3. |
Segmental information |
|
|
|
|
|
|
|
Revenue |
2016
6 months ended
30 June |
2015
6 months ended
30 June |
|
|
$m |
$m |
|
|
|
|
|
Americas |
490 |
471 |
|
Europe |
109 |
144 |
|
AMEA |
115 |
116 |
|
Greater China |
55 |
118 |
|
Central |
69 |
66 |
|
|
_____ |
_____ |
|
Total revenue |
838 |
915 |
|
|
_____ |
_____ |
|
All results relate to continuing operations. |
|
Profit |
2016
6 months ended
30 June
$m |
2015
6 months ended
30 June
$m |
| ||
|
|
|
|
| ||
|
Americas |
313 |
295 |
| ||
|
Europe |
34 |
36 |
| ||
|
AMEA |
39 |
40 |
| ||
|
Greater China |
20 |
34 |
| ||
|
Central |
(62) |
(68) |
| ||
|
|
_____ |
_____ |
| ||
|
Operating profit before exceptional items |
344 |
337 |
| ||
|
Exceptional operating items (note 4) |
(5) |
164 |
| ||
|
|
_____ |
_____ |
| ||
|
Operating profit |
339 |
501 |
| ||
|
|
|
|
| ||
|
Financial income |
4 |
2 |
| ||
|
Financial expenses |
(45) |
(45) |
| ||
|
|
_____ |
_____ |
| ||
|
Profit before tax |
298 |
458 |
| ||
|
|
_____ |
_____ |
| ||
|
All results relate to continuing operations. |
| ||||
|
|
|
|
Assets |
2016
30 June
$m |
2015
31 December
$m |
|
|
|
|
|
Americas |
1,454 |
1,355 |
|
Europe |
365 |
383 |
|
AMEA |
262 |
260 |
|
Greater China |
145 |
148 |
|
Central |
398 |
396 |
|
|
_____ |
_____ |
|
Segment assets |
2,624 |
2,542 |
|
|
|
|
|
Unallocated assets: |
|
|
|
Non-current tax receivable |
37 |
37 |
|
Deferred tax assets |
46 |
49 |
|
Current tax receivable |
6 |
4 |
|
Cash and cash equivalents |
205 |
1,137 |
|
|
_____ |
_____ |
|
Total assets |
2,918 |
3,769 |
|
|
_____ |
_____ |
|
All items above relate to continuing operations. These items are treated as exceptional by reason of their size or nature. | |
|
a) |
Relates to the costs of integrating Kimpton Hotel & Restaurant Group, LLC (‘Kimpton’) into the operations of the Group. Kimpton, an unlisted company operating boutique hotels based in the US, was acquired on 16 January 2015. The integration programme remains in progress and will be completed in 2017. |
|
b) |
Arose from changes to the Venezuelan exchange rate mechanisms and the adoption of the SIMADI exchange rate. |
|
c) |
Related to the implementation of more efficient processes and procedures in the Group’s Global Technology infrastructure to help mitigate future cost increases. |
|
d) |
Arose from the sale of InterContinental Paris – Le Grand on 20 May 2015. |
|
e) |
In 2016, relates to tax relief on the Kimpton integration costs. In 2015, related to tax charges of $16m on the sale of InterContinental Paris – Le Grand, offset by tax relief of $4m in respect of the Kimpton acquisition, $3m on other 2015 exceptional costs and a credit of $7m relating to deferred tax adjustments arising from exceptional transactions in prior years. |
5. |
Tax
|
|
The tax charge on profit for the period from continuing operations, excluding the impact of exceptional items (note 4), has been calculated using an interim effective tax rate of 33% (2015 30%) analysed as follows: |
|
|
2016 |
2016 |
2016 |
2015 |
2015 |
2015 |
| |||
|
6 months ended 30 June |
Profit
$m |
Tax
$m |
Tax
rate |
Profit
$m |
Tax
$m |
Tax
rate |
| |||
|
|
|
|
|
|
|
|
| |||
|
Before exceptional items |
303 |
(99) |
33% |
294 |
(88) |
30% |
| |||
|
|
|
|
|
|
|
|
| |||
|
Exceptional items |
(5) |
2 |
|
164 |
(2) |
|
| |||
|
|
_____ |
_____ |
|
_____ |
____ |
|
| |||
|
|
298 |
(97) |
|
458 |
(90) |
|
| |||
|
|
_____ |
_____ |
|
_____ |
_____ |
|
| |||
|
Analysed as: |
|
|
|
|
|
|
| |||
|
|
UK tax |
|
1 |
|
|
(3) |
|
| ||
|
|
Foreign tax |
|
(98) |
|
|
(87) |
|
| ||
|
|
|
_____ |
|
|
_____ |
|
| |||
|
|
|
(97) |
|
|
(90) |
|
| |||
|
|
|
_____ |
|
|
_____ |
|
| |||
|
|
|
6. |
Earnings per ordinary share
|
|
Basic earnings per ordinary share is calculated by dividing the profit for the period available for IHG equity holders by the weighted average number of ordinary shares, excluding investment in own shares, in issue during the period.
Diluted earnings per ordinary share is calculated by adjusting basic earnings per ordinary share to reflect the notional impact of the weighted average number of dilutive ordinary share awards outstanding during the period.
Adjusted earnings per ordinary share is disclosed in order to show performance undistorted by exceptional items, to give a more meaningful comparison of the Group’s performance. |
|
Continuing and total operations |
2016
6 months ended
30 June |
2015
6 months
ended
30 June | |
|
|
|
| |
|
Basic earnings per ordinary share |
|
| |
|
Profit available for equity holders ($m) |
200 |
367 | |
|
Basic weighted average number of ordinary shares (millions) |
228 |
235 | |
|
Basic earnings per ordinary share (cents) |
87.7 |
156.2 | |
|
|
_____ |
_____ | |
|
Diluted earnings per ordinary share |
|
| |
|
Profit available for equity holders ($m) |
200 |
367 | |
|
Diluted weighted average number of ordinary shares (millions) |
229 |
237 | |
|
Diluted earnings per ordinary share (cents) |
87.3 |
154.9 | |
|
|
_____ |
_____ | |
|
Adjusted earnings per ordinary share |
|
| |
|
Profit available for equity holders ($m) |
200 |
367 | |
|
Adjusting items (note 4): |
|
| |
|
|
Exceptional operating items ($m) |
5 |
(164) |
|
|
Tax on exceptional operating items ($m) |
(2) |
2 |
|
|
_____ |
_____ | |
|
Adjusted earnings ($m) |
203 |
205 | |
|
Basic weighted average number of ordinary shares (millions) |
228 |
235 | |
|
Adjusted earnings per ordinary share (cents) |
89.0 |
87.2 | |
|
|
_____ |
_____ | |
|
Diluted weighted average number of ordinary shares (millions) |
229 |
237 | |
|
Adjusted diluted earnings per ordinary share (cents) |
88.6 |
86.5 | |
|
|
_____ |
_____ |
|
The diluted weighted average number of ordinary shares is calculated as: | ||
|
|
2016
millions |
2015
millions
|
|
Basic weighted average number of ordinary shares |
228 |
235 |
|
Dilutive potential ordinary shares |
1 |
2 |
|
|
_____ |
_____ |
|
|
229 |
237 |
|
|
_____ |
_____ |
7. |
Dividends and shareholder returns | |||||
|
|
2016
cents per share |
2015
cents per share |
2016
$m |
2015
$m | |
|
Paid during the period: |
|
|
|
| |
|
|
Final (declared for previous year) |
57.5 |
52.0 |
137 |
125 |
|
|
Special |
632.9 |
- |
1,500 |
- |
|
|
|
_____ |
_____ |
_____ |
_____ |
|
|
|
690.4 |
52.0 |
1,637 |
125 |
|
|
|
_____ |
_____ |
_____ |
_____ |
|
Proposed for the period: |
|
|
|
| |
|
|
Interim |
30.0 |
27.5 |
59 |
63* |
|
|
_____ |
_____ |
_____ |
_____ | |
|
*Amount paid |
|
|
|
| |
|
On 23 February 2016, the Group announced a $1.5bn return of funds to shareholders by way of a special dividend and share consolidation. On 6 May 2016, shareholders approved the share consolidation on the basis of 5 new ordinary shares of 18 318/329p per share
for every 6 existing ordinary shares of 15 265/329p, which became effective on 9 May 2016 and resulted in the consolidation of 42m shares. The dividend was paid on 23 May 2016.
The dividend and share consolidation had the same economic effect as a share repurchase at fair value, therefore previously reported earnings per share has not been restated.
The total number of shares held as treasury shares at 30 June 2016 was 8.9m.
|
|
2016
6 months
ended
30 June |
2015
6 months ended
30 June | |
|
$m |
$m | |
|
|
| |
Profit for the period |
201 |
368 | |
Adjustments for: |
|
| |
|
Net financial expenses |
41 |
43 |
|
Income tax charge |
97 |
90 |
|
Depreciation and amortisation |
48 |
49 |
|
Exceptional operating items |
5 |
(164) |
|
Equity-settled share-based cost |
11 |
11 |
|
Dividends from associates and joint ventures |
2 |
2 |
|
Net change in loyalty programme liability and System Fund surplus |
110 |
107 |
|
Other changes in net working capital |
(82) |
(160) |
|
Net settlement of litigation claim |
(4) |
- |
|
Retirement benefit contributions, net of costs |
- |
(1) |
|
Cash flows relating to exceptional operating items |
(10) |
(33) |
|
Other items |
3 |
1 |
|
|
_____ |
_____ |
Total adjustments |
221 |
(55) | |
|
_____ |
_____ | |
Cash flow from operations |
422 |
313 | |
|
_____ |
_____ |
9. |
Net debt | ||||||
|
|
2016
30 June |
2015
31 December |
| |||
|
|
$m |
$m |
| |||
|
|
|
|
| |||
|
Cash and cash equivalents |
205 |
1,137 |
| |||
|
Loans and other borrowings – current |
(475) |
(427) |
| |||
|
Loans and other borrowings – non-current |
(1,559) |
(1,239) |
| |||
|
|
_____ |
_____ |
| |||
|
Net debt |
(1,829) |
(529) |
| |||
|
|
_____ |
_____ |
| |||
|
Finance lease obligation included above |
(226) |
(224) |
| |||
|
|
_____ |
_____ |
| |||
|
|
| |||||
10. |
Movement in net debt |
| |||||
|
|
2016
6 months ended
30 June |
2015
6 months
ended
30 June |
| |||
|
|
$m |
$m |
| |||
|
|
|
|
| |||
|
Net (decrease)/increase in cash and cash equivalents, net of overdrafts |
(973) |
75 |
| |||
|
Add back cash flows in respect of other components of net debt: |
|
|
| |||
|
|
New borrowings |
- |
(400) |
| ||
|
|
(Increase)/decrease in other borrowings |
(395) |
208 |
| ||
|
|
_____ |
_____ |
| |||
|
Increase in net debt arising from cash flows |
(1,368) |
(117) |
| |||
|
|
|
|
| |||
|
Non-cash movements: |
|
|
| |||
|
|
Finance lease obligations |
(2) |
(2) |
| ||
|
|
Increase in accrued interest |
(30) |
(23) |
| ||
|
|
Exchange and other adjustments |
100 |
(35) |
| ||
|
|
_____ |
_____ |
| |||
|
Increase in net debt |
(1,300) |
(177) |
| |||
|
|
|
|
| |||
|
Net debt at beginning of the period |
(529) |
(1,533) |
| |||
|
|
_____ |
_____ |
| |||
|
Net debt at end of the period |
(1,829) |
(1,710) |
| |||
|
|
_____ |
_____ |
|
11. |
Fair values
| ||||
|
The table below compares carrying amounts and fair values of the Group’s financial assets and liabilities at 30 June 2016: | ||||
|
|
2016
30 June
Carrying value
$m |
2016
30 June
Fair value
$m |
2015
31 December
Carrying value
$m |
2015
31 December
Fair value
$m |
|
Financial assets: |
|
|
|
|
|
Equity securities available-for-sale |
141 |
141 |
150 |
150 |
|
Loans and receivables |
126 |
126 |
134 |
134 |
|
|
_____ |
_____ |
_____ |
_____ |
|
|
267 |
267 |
284 |
284 |
|
|
_____ |
_____ |
_____ |
_____ |
|
Financial liabilities: |
|
|
|
|
|
£250m 6% bonds 2016 |
(348) |
(344) |
(371) |
(386) |
|
£400m 3.875% bonds 2022 |
(546) |
(580) |
(588) |
(608) |
|
£300m 3.75% bonds 2025 |
(413) |
(432) |
(444) |
(443) |
|
Finance lease obligations |
(226) |
(342) |
(224) |
(305) |
|
Unsecured bank loans |
(391) |
(391) |
- |
- |
|
|
_____ |
_____ |
_____ |
_____ |
|
|
(1,924) |
(2,089) |
(1,627) |
(1,742) |
|
|
_____ |
_____ |
_____ |
_____ |
|
Cash and cash equivalents, trade and other receivables, bank overdrafts, trade and other payables and provisions are excluded from the above tables as their fair value approximates book value. The fair value of loans and receivables approximates book value based on prevailing market rates. The fair value of the £250m, £400m and £300m bonds is based on their
quoted market price. The fair value of finance lease obligations is calculated by discounting future cash flows at prevailing interest rates. The fair value of unsecured bank loans approximates book value as interest rates reset to market rates on a frequent basis.
Equity securities available-for-sale and derivatives are held in the Group statement of financial position at fair value as set out in the following table. | |||||
|
| |||||
|
30 June 2016
|
Level 1
$m |
Level 2
$m |
Level 3
$m |
Total
$m |
|
|
Assets |
|
|
|
|
|
|
Equity securities available-for-sale: |
|
|
|
|
|
|
Quoted equity shares |
16 |
- |
- |
16 |
|
|
Unquoted equity shares |
- |
- |
125 |
125 |
|
|
31 December 2015
|
Level 1
$m |
Level 2
$m |
Level 3
$m |
Total
$m |
|
|
Assets |
|
|
|
|
|
|
Equity securities available-for-sale: |
|
|
|
|
|
|
Quoted equity shares |
14 |
- |
- |
14 |
|
|
Unquoted equity shares |
- |
- |
136 |
136 |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
Derivatives |
- |
(3) |
- |
(3) |
|
|
|
|
|
|
|
|
|
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
|
| ||||
|
The Level 2 derivatives consist of foreign exchange swaps which are valued using data from observable swap curves, adjusted to take account of the Group’s own credit risk.
The Level 3 equity securities relate to investments in unlisted shares which are valued either by applying an average price-earnings (P/E) ratio for a competitor group to the earnings generated by the investment, or by reference to share of net assets if the investment is currently loss-making or a recent property valuation is available. The average P/E ratio for the period
was 19.7 (2015 31 December 21.9) and a non-marketability factor of 30% (2015 31 December 30%) was applied.
A 10% increase in the average P/E ratio would result in a $2m increase (2015 31 December $3m) in the fair value of the investments and a 10% decrease in the average P/E ratio would result in a $2m decrease (2015 31 December $3m) in the fair value of the investments. A 10% increase in net assets would result in a $7m increase (2015 31 December $8m) in the fair value of investments
and a 10% decrease in net assets would result in a $7m decrease (2015 31 December $8m) in the fair value of the investments.
There were no transfers between Level 1 and Level 2 fair value measurements during the period and no transfers into and out of Level 3.
The following table reconciles movements in instruments classified as Level 3 during the period: |
| ||||
|
|
$m |
| |||
|
|
|
| |||
|
At 1 January 2016 |
136 |
| |||
|
Proceeds |
(6) |
| |||
|
Valuation losses recognised in other comprehensive income |
(5) |
| |||
|
|
____ |
| |||
|
At 30 June 2016 |
125 |
| |||
|
|
_____ |
|
|
|
|
|
|
12. |
Commitments and contingencies
| ||||
|
At 30 June 2016, the amount contracted for but not provided for in the financial statements for expenditure on property, plant and equipment and intangible assets was $92m (2015 31 December $76m). The Group has also committed to invest in a number of its associates, with an estimated outstanding commitment of $42m at 30 June 2016 based on current forecasts (2015 31 December
$45m).
On 26 July 2016, Kimpton Hotels and Restaurants announced that it had been made aware of a report of unauthorised charges occurring on payment cards that were previously used legitimately at Kimpton properties. Due to the recent discovery of these occurrences and the investigation process being in the early stages, it is not practicable to make a reliable estimate of the
possible financial effect on the Group at this time.
At 30 June 2016, the Group had no other contingent liabilities (2015 31 December $nil).
In limited cases, the Group may provide performance guarantees to third-party hotel owners to secure management contracts. At 30 June 2016, the amount provided in the financial statements was $nil (2015 31 December $1m) and the maximum unprovided exposure under such guarantees was $13m (2015 31 December $13m).
The Group may guarantee bank loans made to facilitate third-party ownership of hotels in which the Group has an equity interest. At 30 June 2016, there were such guarantees of $33m in place (2015 31 December $30m). The Group has also provided an indemnity to its joint venture partner for 100% of the obligations related to a $43m supplemental bank loan made to the Barclay
associate on 31 December 2015.
From time to time, the Group is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent in litigation. The Group has also given warranties in respect of the disposal of certain of its former subsidiaries. It is the view of the Directors that, other than to the extent that liabilities have been provided for in these financial
statements, it is not possible to quantify any loss to which these proceedings or claims under these warranties may give rise, however, as at the date of reporting, the Group does not believe that the outcome of these matters will have a material effect on the Group’s financial position. |
INDEPENDENT REVIEW REPORT TO INTERCONTINENTAL HOTELS GROUP PLC
|
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 which comprises the Group income statement, Group statement of comprehensive income, Group statement of changes in equity, Group statement of financial position, Group statement of cash flows and
the related notes 1 to 12. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) , ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom’s Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, ‘Interim Financial Reporting’, as adopted
by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of the Entity’ issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries,
primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2016 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency
Rules of the United Kingdom’s Financial Conduct Authority.
Ernst & Young LLP
London
1 August 2016 |
|
|
InterContinental Hotels Group PLC |
|
|
(Registrant) |
|
|
|
|
By: |
/s/ H. Patel |
|
Name: |
H. PATEL |
|
Title: |
COMPANY SECRETARIAL OFFICER |
|
|
|
|
Date: |
02 August 2016 |
|
|
|