Regulatory Story
Go to market news section View chart   Print
Company InterContinental Hotels Group PLC
TIDM IHG
Headline

Final Results

Released 07:00 19-Feb-2013
Number 1479Y07

RNS Number : 1479Y
InterContinental Hotels Group PLC
19 February 2013
 



InterContinental Hotels Group PLC

Preliminary Results for the year to 31 December 2012

Strong growth and scale efficiencies drive double-digit increase in profits

 

Financial summary1

2012

2011


% Change YoY

Actual

CER3

CER & ex. LDs4

Revenue

$1,835m

$1,768m

4%

5%

6%

Operating profit

$614m

$559m

10%

11%

13%

Adjusted basic EPS

141.5¢

130.4¢

9%



Basic EPS2

189.5¢

159.2¢

19%



Total dividend per share

64.0¢

55.0¢

16%



Net debt

$1,074m

$538m




Fee revenue5 growth

6.8%

5.7%




RevPAR growth

5.2%

6.2%




Net Rooms growth

2.7%

1.7%




 

Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, said:

"2012 was another year of significant progress for IHG with our preferred brands driving RevPAR up 5.2%, led by the US up 6.3%.  Together with 2.7% net rooms growth, which is fuelled increasingly by our expansion in developing markets, this drove up fee revenues by an impressive 6.8%.  This growing scale allowed us to reinvest in the business while achieving better than anticipated margin progression.

The financing environment remained tough through 2012 in many of our key markets, but we still signed on average one hotel a day into our pipeline.  This reflects the excellent relationship we enjoy with our owners and further strengthens our foundation for high quality growth.  We extended our portfolio of preferred brands, launching in the first quarter of 2012 the innovative HUALUXE Hotels & Resorts and EVEN Hotels.

The $1bn return of capital, announced in August, underlines the benefit of our asset light strategy in delivering strong free cash flow, and our commitment to return value to shareholders.

IHG's proven strategy and resilient business model position us for further good performance in 2013, despite the challenging economic environment.  The 16% increase in our dividend demonstrates the confidence we have in our ability to deliver sustained high quality growth, as we prepare to celebrate our 10th anniversary as a standalone business."

 

Driving High Quality Growth

$21.2bn of total gross revenue5 from hotels in IHG's system, up 5%

2012 global RevPAR growth of 5.2%, with rate up 3.2% and occupancy up 1.2%pts


-

Americas 6.1% (US 6.3%); Europe 1.7%; AMEA 4.9%; Greater China 5.4%.


-

Q4 global RevPAR growth of 3.9%: Americas 5.7%; Europe 1.2%; AMEA 1.8%; Greater China (0.3)%.

System size of 676k rooms (4,602 hotels), up 2.7% year on year


-

34k rooms (226 hotels) opened and 54k rooms (356 hotels) signed, both up around 5% on an underlying5 basis.


-

16k rooms removed, down 51% on 2011, and now at more normal levels post completion of Holiday Inn relaunch.


-

High quality pipeline of 169k rooms (1,053 hotels), with c. 40% under construction.  


-

5% global industry supply share and 12% active global pipeline share support high quality growth.

Fee revenues5  up 6.8%


-

Increasing proportion of new rooms are now coming from developing markets, driving strong fee revenue growth, albeit at lower absolute RevPAR levels, particularly in the initial years as demand drivers mature.


-

Developing markets represent 19% of system size, 29% of 2012 room openings and 50% of our pipeline.

Building preferred brands


-

Good traction for our new brands, with 15 HUALUXE hotels now in the pipeline and our first EVEN hotel signed in the fourth quarter.


-

Holiday Inn continues to outperform, growing premiums to the upper midscale segment in the US over the past 5 years by 7%pts for Holiday Inn and 5%pts for Holiday Inn Express. Holiday Inn ranked "Highest in Guest Satisfaction Among Mid-scale Full Service Hotel Chains" by J.D. Power and Associates for 2nd year in a row.


-

Crowne Plaza repositioning programme is progressing well.


-

Hotel Indigo system size at 50 hotels with a further 47 in the pipeline (total gross revenue: $172m, up 29%).

Best in class delivery


-

69% of rooms revenue delivered through IHG Channels and by Priority Club Rewards members direct to hotel.

Growing margins


-

Fee based margins of 42.6%, up 2%pts, a particularly strong result, which will revert back to more normal levels of growth in 2013.

 

Asset sales

The disposal process for InterContinental London Park Lane has commenced, and continues for InterContinental New York Barclay.


Current Trading Update

January global RevPAR up 6.6%, with rate up 2.1%.  Americas 7.0%, Europe (0.1)%, AMEA 6.0%.  Greater China up 21.0% principally reflects the shift in timing of Chinese New Year in 2013 into February from January.

One individually significant liquidated damages receipt of $31m in Americas managed in Q1 2013.  $6m benefit in the full year 2013 from cessation of depreciation on the InterContinental London Park Lane, now held for sale.

1 All figures are before exceptional items unless otherwise noted.  See appendices 3 & 4 for financial
   headlines

2 After exceptional items

3 CER = constant exchange rates

4 Excluding significant liquidated damages: $16m 2011, $3m 2012.

5See appendix 6 for definition

 

Americas - Double-digit adjusted profit growth driven by RevPAR outperformance

RevPAR increased 6.1%, with 4.1% rate growth, and fourth quarter RevPAR increased 5.7%.  US RevPAR was up 6.3% in 2012, with 6.2% growth in the fourth quarter, despite uncertainty regarding the presidential election and "fiscal cliff".  On a total basis, including the benefit of new hotels, US RevPAR grew 7.0% in the year, outperforming the industry6, which was up 6.8%.

Revenue increased 1% to $837m and operating profit increased 8% to $486m.  After adjusting for owned hotel disposals, liquidated damages receipts in the managed business of $3m in 2012 and $10m in 2011 and results from managed lease hotels5, revenue was up 6% and operating profit up 10%.  This was predominantly driven by the franchise business, where royalties were up 9% due to 6.0% RevPAR growth and 2.3% net system size growth.  Owned profits increased 41%, driven by double digit RevPAR growth at our InterContinental hotels in Boston and San Francisco and 4% RevPAR growth at InterContinental New York Barclay.

We opened 17k rooms, up 8% on 2011 on an underlying5 basis, including 6 Hotel Indigo hotels, and IHG's second InterContinental hotel in Mexico City.  We signed 26k rooms, with the first EVEN hotel, a flagship property in Manhattan, New York City, signed in October.  The Holiday Inn brand family accounted for c.70% of hotel openings and signings in the year, demonstrating the ongoing benefits of the re-launch.

 

 

Europe - Robust performance and strong pace of openings

RevPAR increased 1.7%, with 1.2% rate growth and fourth quarter RevPAR increased 1.2%.  Despite challenging economic conditions across Europe, RevPAR during the year grew by 2.5% in the UK and by 5.4% in Germany, where the industry benefited from a busy trade fair schedule.

Revenue increased 8% (13% at CER) to $436m and operating profit increased 11% (16% at CER) to $115m.  At CER and after adjusting for a leased hotel disposal and excluding results from managed lease hotels5, revenue increased 5% and operating profit increased 16%.  This was driven by a 2.1% increase in net system size and solid RevPAR growth, including 8.0% at InterContinental London Park Lane and 2.5% at InterContinental Le Grand Paris, plus a $4m decrease in regional overheads.

We signed 7k rooms (48 hotels), up 22% on 2011, including the first 2 Holiday Inn Express hotels in Russia, 6 Holiday Inn brand family hotels in Germany and 7 Hotel Indigo hotels, with firsts for this brand in France, Israel and Spain.  5k rooms (39 hotels) were opened into the system, the highest number of hotel openings in the region in the last 4 years.  Openings included InterContinental London Westminster, our second for the brand in London, and 5 Hotel Indigo hotels, doubling the system size in Europe for the brand.

 

 

AMEA -  RevPAR growth and cost control drive good profit growth

RevPAR increased 4.9%, with 1.8% growth in the fourth quarter.  Strong trading in South East Asia and Japan was offset by slowing economic growth in some other markets in 2012.  In the Middle East, political tensions continue to impact trading in some countries such as Lebanon, but markets such as Saudi Arabia and the UAE have performed well, with RevPAR up 8.0% and 5.5% in the year, respectively.

AMEA revenue increased 1% (0% CER) to $218m and operating profit increased 5% (4% CER) to $88m.  At CER and after adjusting for a $6m liquidated damages receipt and the related disposal in 2011 of a hotel and partnership interest in Australia, revenue increased 3% and operating profit increased 16%, benefiting from robust trading in the managed business and careful cost control.

We signed 8k rooms (36 hotels) in the region, of which 4k were Holiday Inn brand family rooms signed in India and Indonesia.  We also signed 6 InterContinental hotels, including 2 resort locations in Australia and Thailand.  We opened 4k rooms (16 hotels) in the year, including 4 Crowne Plaza hotels, 2 Crowne Plaza Resorts and the first Holiday Inn Express in India, in Ahmedabad.  This hotel was opened by IHG and Duet India Hotels Group, and was awarded '2012 World's Leading New Mid-Market Hotel' by World Travel Awards. 

 

 

Greater China -  Increasing scale drives another year of double-digit profit growth

RevPAR increased 5.4% with rate growth of 3.1%.  RevPAR was down 0.3% in the fourth quarter reflecting the ongoing industry-wide impact of the China-Japan territorial island dispute, the political leadership change and the broader economic slowdown across the region. 

Revenue increased 12% (12% CER) to $230m, with fee growth5 of 16%, and operating profit was up 21% (22% CER) to $81m.  This was driven by 19% profit growth in the managed business where RevPAR was up 5.6% and net rooms up 10% (following 14% rooms growth in 2011).  InterContinental Hong Kong also had a strong year with 6.7% RevPAR growth and good cost control, driving owned operating profit up 22%.

We opened 8k rooms in the year, taking our system size in the region up 12% to 62k, our 7th consecutive year of double digit room growth.  Openings included 8 Crowne Plaza hotels, 2 Hotel Indigo hotels and Holiday Inn Macau Cotai Central, which at 1,224 rooms is the largest Holiday Inn in the world.  Signings of 13k rooms were up 11% on 2011, taking our pipeline to 51k rooms and affirming our market leading position.  Signings included 15 HUALUXE hotels.  

 

 


5See appendix 6 for definition

6 Source: Smith Travel Research



 

Uses of Cash

Cash generation: Free cash flow of $463m (2011: $422m) plus $8m cash proceeds from disposals, more than covered growth investment and ordinary dividends in the year. 

Growth Investment: 2012 growth capital expenditure of $20m reflects the unpredictable timing of this type of spend$113m maintenance capital expenditure.  2013 expectations unchanged: $100m-$200m growth capital expenditure and c.$150m maintenance capital expenditure.

Ordinary dividend: up 16%, the third consecutive year of double-digit growth.

Capital returns: $0.5bn special dividend paid in October 2012.  $107m of $0.5bn share buyback programme completed in the fourth quarter.

 

 

Interest, debt, tax and exceptional items

Interest: 2012 charge of $54m (2011: $62m), decreased by $8m primarily due to lower average net debt levels.

Net debt: $1,074m at the end of the period, up $536m on 2011 including the payment of $612m in relation to the special dividend and share buyback programme.  IHG has extended its maturities and diversified its debt profile, issuing a 10 year £400m bond in the fourth quarter.

Tax: Effective rate for 2012 is 27% (2011: 24%).  2013 tax rate expected to be in low 30s, as previously guided.

Exceptional operating items: Net exceptional charge before tax of $4m (2011: $35m net credit).  An exceptional tax credit of $142m relates to the settlement of prior year matters and changes in legislation resulting in the recognition of deferred tax assets.

Pension:  IHG has agreed with the Trustees of the UK defined benefit pension plan to make additional contributions of £30m in 2013 and £15m in 2014, in addition to the £45m which was announced at Q3 results and paid in October 2012.  This follows the triennial actuarial valuation as at 31 March 2012 which showed a deficit of £132m.

 

 

 

Change from Quarterly to Half Yearly Reporting

IHG will release interim management statements for Q1 and Q3, and in line with wider UK market practice, focus on reporting full financial statements for a more meaningful time period of 6 months. 

We will continue to publish supplementary data for rooms and RevPAR for Q1 and Q3, and hold a conference call with Q&A session. 

 



 

Appendix 1: RevPAR Movement Summary

 

 

January 2013

Full Year 2012

Q4 2012

RevPAR

Rate

Occ.

RevPAR

Rate

Occ.

RevPAR

Rate

Occ.

Group

6.6%

2.1%

2.3pts

5.2%

3.2%

1.2pts

3.9%

2.5%

0.9pts

Americas

7.0%

3.9%

1.5pts

6.1%

4.1%

1.2pts

5.7%

3.8%

1.1pts

Europe

(0.1)%

1.2%

(0.7)pts

1.7%

1.2%

0.4pts

1.2%

0.5%

0.5pts

AMEA

6.0%

1.4%

2.9pts

4.9%

1.2%

2.4pts

1.8%

(0.2)%

1.4pts

G. China

21.0%

(6.7)%

12.8pts

5.4%

3.1%

1.3pts

(0.3)%

1.4%

(1.1)pts

 

Appendix 2: Full Year System & Pipeline Summary (rooms)


System

Pipeline

Openings

Net

Total

YoY%

Signings

Total

Group

33,922

(16,288)

17,634

675,982

3%

53,812

169,030

Americas

16,618

(9,199)

7,419

449,617

2%

25,536

72,573

Europe

5,477

(3,335)

2,142

102,027

2%

7,023

15,184

AMEA

4,243

(2,589)

1,654

62,737

3%

7,866

30,357

G. China

7,584

6,419

61,601

12%

13,387

50,916

 

Appendix 3: Quarter 4 financial headlines

 

Operating Profit $m

Total

Americas

Europe

AMEA

G. China

Central

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

Franchised

128

118

108

99

15

14

3

4

2

1

-

-

Managed

67

54

15

9

10

9

27

23

15

13

-

-

Owned & leased

40

32

8

4

13

11

2

1

17

16

-

-

Regional overheads

(36)

(32)

(16)

(12)

(10)

(10)

(4)

(5)

(6)

(5)

-

-

Profit pre central overheads

199

172

115

100

28

24

28

23

28

25

-

-

Central overheads

(38)

(35)

-

-

-

-

-

-

-

-

(38)

(35)

Group Operating profit

161

137

115

100

28

24

28

23

28

25

(38)

(35)


 

Appendix 4: Full year financial headlines

 

Operating Profit $m

Total

Americas

Europe

AMEA

G. China

Central

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

2012

2011

Franchised

547

511

466

431

65

65

12

12

4

3

-

-

Managed

221

208

48

52

32

26

90

87

51

43

-

-

Owned & leased

125

108

24

17

50

49

6

5

45

37

-

-

Regional overheads

(123)

(121)

(52)

(49)

(32)

(36)

(20)

(20)

(19)

(16)

-

-

Profit pre central overheads

770

706

486

451

115

104

88

84

81

67

-

-

Central overheads

(156)

(147)

-

-

-

-

-

-

-

-

(156)

(147)

Group Operating profit

614

559

486

451

115

104

88

84

81

67

(156)

(147)

 

Appendix 5: Constant exchange rate (CER) operating profit movement before exceptional items


Total***

Americas

Europe

AMEA

G. China

Actual*

CER**

Actual*

CER**

Actual*

CER**

Actual*

CER**

Actual*

CER**

Growth/ (decline)

10%

11%

8%

8%

11%

16%

5%

4%

21%

22%

Exchange rates:

GBP:USD

EUR:USD

* US dollar actual currency

 

2012

0.63

0.78

** Translated at constant 2011 exchange rates

 

2011

0.62

0.72

*** After central overheads

 

 

Appendix 6: Definitions

Total gross revenue: 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.

Fee revenue: Group revenue excluding owned & leased hotels, managed leases and significant liquidated damages. Growth stated at CER.

Fee based margins: adjusted for owned and leased hotels, managed leases and individually significant liquidated damages payments.

Managed lease hotels: properties structured for legal reasons as operating leases but with the same characteristics as management contracts.

Underlying openings & signings: openings growth adjusted to exclude 5k US Army base rooms and 7k InterContinental Alliance rooms opened in 2011. Signings growth adjusted to exclude 5k US Army base rooms also signed in 2011.

 

Appendix 7: Investor Information for 2012 final dividend

Ex-dividend date:

20 March 2013

Record date:

22 March 2013

Payment date:

31 May 2013

Dividend payment:

Ordinary shares = 27.7 pence  per share

ADRs = 43.0 cents per ADR

 



 

 

 

For further information, please contact:

Investor Relations (Catherine Dolton; Isabel Green):

+44 (0)1895 512176


Media Relations (Yasmin Diamond; Emma Corcoran):

+44 (0)1895 512426


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.

Presentation for Analysts and Shareholders:

A presentation with Richard Solomons, Chief Executive Officer and Tom Singer, Chief Financial Officer will commence at 9.30am UK time on 19 February at Bank of America Merrill Lynch Financial Centre, 2 King Edward Street, London, EC1A 1HQ.  There will be an opportunity to ask questions.  The presentation will conclude at approximately 10.30am.

There will be a live audio webcast of the results presentation on the web address www.ihg.com/prelims13.  The archived webcast of the presentation is expected to be on this website later on the day of the results and will remain on it for the foreseeable future.  There will also be a live dial-in facility:

UK toll:

UK toll free:

US toll:

Passcode

+44 (0)20 3003 2666

0808 109 0700

+1 212 999 6659

IHG

A replay of the conference call will also be available following the event.  To access this please dial the relevant number below and use the access number 5273706

Replay

+44 (0)20 8196 1998

US conference call and Q&A:

There will also be a conference call, primarily for US investors and analysts, at 9.00am Eastern Standard Time on 19 February with Richard Solomons, Chief Executive Officer and Tom Singer, Chief Financial Officer. 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

A replay of the conference call will also be available following the event.  To access this please dial the relevant number below and use the access number 8384211

Replay

+44 (0)20 8196 1998

Website:

The full release and supplementary data will be available on our website from 7.00 am (London time) on 19 February. The web address is www.ihg.com/prelims13. To watch a video of Tom Singer reviewing our results visit our YouTube channel at www.youtube.com/ihgplc.

Notes to Editors:

IHG (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with nine hotel brands including InterContinental® Hotels & Resorts, Hotel Indigo®, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels and Resorts, Holiday Inn Express®, Staybridge Suites®, Candlewood Suites®, EVEN™ Hotels and HUALUXE™ Hotels & Resorts. IHG also manages Priority Club® Rewards, the world's first and largest hotel loyalty programme with over 71 million members worldwide.

IHG franchises, leases, manages or owns over 4,600 hotels and more than 675,000 guest rooms in nearly 100 countries and territories. With more than 1,000 hotels in its development pipeline, IHG expects to recruit around 90,000 people into additional roles across its estate 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.

Visit www.ihg.com for hotel information and reservations and www.priorityclub.com for more on Priority Club Rewards. For our latest news, visit www.ihg.com/media, www.twitter.com/ihg, www.facebook.com/ihg or www.youtube.com/ihgplc.

 

Cautionary note regarding forward-looking statements:

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.

 

 

 

This Business Review provides a commentary on the performance of InterContinental Hotels Group PLC (the Group or IHG) for the financial year ended 31 December 2012.

 

Group Performance

 

12 months ended 31 December

Group results

2012

2011

%

 

$m

$m

change

Revenue

 

 

 

 

Americas

837

830

0.8

 

Europe

436

405

7.7

 

AMEA

218

216

0.9

 

Greater China

230

205

12.2

 

Central

114

112

1.8

 

 

____

____

_____

 

1,835

1,768

3.8

 

____

____

____

Operating profit

 

 

 

 

Americas

486

451

7.8

 

Europe

115

104

10.6

 

AMEA

88

84

4.8

 

Greater China

81

67

20.9

 

Central

(156)

(147)

(6.1)

 

 

____

____

_____

Operating profit before exceptional items

614

559

9.8

Exceptional operating items

(4)

35

(111.4)

 

___

___

___

 

610

594

2.7

Net financial expenses

(54)

(62)

12.9

 

___

___

___

Profit before tax

556

532

4.5

 

___

___

___

Earnings per ordinary share

 

 

 

 

Basic

189.5¢

159.2¢

19.0

 

Adjusted

141.5¢

130.4¢

8.5

 

 

 

 

 

Average US dollar to sterling exchange rate

$1 : £0.63

$1 : £0.62

1.6

 

Group results

Revenue increased by 3.8% to $1,835m and operating profit before exceptional items increased by 9.8% to $614m during the 12 months ended 31 December 2012.

 

Fee revenue, being Group revenue excluding revenue from owned and leased hotels, significant liquidated damages received in 2012 and 2011 and properties that are structured for legal reasons as operating leases, but with the same characteristics as management contracts, increased by 6.8% when translated at constant currency and applying 2011 exchange rates.

 

The 2012 results reflect continued RevPAR growth in each of the regions, with an overall RevPAR increase of 5.2%, including a 3.2% increase in average daily rate. The results also benefited from system size growth of 2.7% year-on-year to 675,982 rooms. Group RevPAR growth remained robust for the year, reflecting favourable supply and demand dynamics in the US over 2012, although trading was also affected by the impact of Eurozone uncertainty as well as industry-wide challenges in Greater China in the latter part of the year related to the political leadership change.

 

Operating profit improved in each of the regions. RevPAR growth of 6.1% in The Americas helped drive an operating profit increase of $42m (9.5%), after excluding the benefit of a $3m liquidated damages receipt in 2012 and a $10m liquidated damages receipt in 2011. Operating profit in Europe increased by $11m (10.6%), with RevPAR growth of 1.7%. Operating profit in AMEA increased by $13m (17.3%), after adjusting for a $6m liquidated damages receipt in 2011 and the disposal of a hotel asset and partnership interest that contributed $3m in profits in 2011, reflecting RevPAR growth of 4.9%. Strong operating profit growth of $14m in Greater China reflected an 11.6% increase in system size as well as 5.4% RevPAR growth.

 

At constant currency, central overheads increased from $147m to $158m in 2012 ($156m at actual currency), reflecting investment in infrastructure and capabilities to support the growth of the business.

 

Operating profit margin was 42.6%, up 2.0 percentage points on 2011, after adjusting for owned and leased hotels, The Americas and Europe managed leases and significant liquidated damages received in 2012 and 2011.

 

Profit before tax increased by $24m to $556m. Adjusted earnings per ordinary share increased by 8.5% to 141.5¢.,

 

 

 

12 months ended 31 December

 

2012

2011

%

Total gross revenue

$bn

$bn

change

 

 

 

 

InterContinental

4.5

4.4

2.3

Crowne Plaza

4.0

3.9

2.6

Holiday Inn

6.3

6.0

5.0

Holiday Inn Express

4.8

4.4

9.1

Staybridge Suites

0.6

0.6

-

Candlewood Suites

0.5

0.5

-

Hotel Indigo

0.2

0.1

100.0

Other brands

0.3

0.3

-

 

____

____

____

Total

21.2

20.2

5.0

 

____

____

____

 

Total gross revenue

One measure of IHG hotel system performance is the growth in total gross revenue, defined as total room revenue from franchised hotels and total hotel revenue from managed, owned and leased hotels. Total gross revenue is not revenue attributable to IHG, as it is derived mainly from hotels owned by third parties.

 

Total gross revenue increased by 5.0% from $20.2bn in 2011 to $21.2bn in 2012, including a 5.0% increase in Holiday Inn and a 9.1% increase in Holiday Inn Express.

 

 

 

Hotels

Rooms

Global hotel and room count

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

170

1

57,314

(284)

 

Crowne Plaza

392

5

108,307

3,203

 

Holiday Inn*

1,247

7

231,488

3,232

 

Holiday Inn Express

2,192

78

205,631

8,965

 

Staybridge Suites

189

10

20,696

1,129

 

Candlewood Suites

299

14

28,675

1,175

 

Hotel Indigo

50

11

5,661

1,097

 

Other

63

(4)

18,210

(883)

 

 

____

____

______

_____

Total

4,602

122

675,982

17,634

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

3,934

102

500,792

11,721

 

Managed

658

21

170,998

6,005

 

Owned and leased

10

(1)

4,192

(92)

 

 

____

____

______

_____

Total

4,602

122

675,982

17,634

 

 

____

____

______

_____

 

* Includes 10 Holiday Inn Club Vacations (3,701 rooms) and 37 Holiday Inn Resort properties ((8,806 rooms) (2011: 7 Holiday Inn Club Vacations (2,928 rooms) and 32 Holiday Inn Resort properties (7,809 rooms)).

 

 

 

Global hotel and room count

During 2012, the IHG global system (the number of hotels and rooms which are franchised, managed, owned or leased by the Group) increased by 122 hotels (17,634 rooms).

 

Openings of 226 hotels (33,922 rooms) were driven by continued expansion in the US, particularly within the Holiday Inn brand family which opened more than 11,000 rooms during 2012, and Greater China. The level of hotel removals fell from 198 hotels (33,078 rooms) in 2011 to 104 hotels (16,288 rooms) in 2012, as anticipated following the completion of the Holiday Inn relaunch.

 

 

Hotels

Rooms

Global pipeline

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

48

(3)

15,713

(1,910)

 

Crowne Plaza

98

(10)

31,183

(3,460)

 

Holiday Inn*

243

(24)

44,988

(5,762)

 

Holiday Inn Express

452

(18)

51,760

(441)

 

Staybridge Suites

71

(24)

7,544

(2,482)

 

Candlewood Suites

78

(16)

6,742

(1,320)

 

Hotel Indigo

47

(12)

5,869

(1,310)

 

EVEN

1

1

230

230

 

HUALUXE

15

15

4,904

4,904

 

Other

-

-

97

97

 

 

____

____

______

_____

Total

1,053

(91)

169,030

(11,454)

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

744

(109)

82,901

(13,612)

 

Managed

309

18

86,129

2,158

 

 

____

____

______

_____

Total

1,053

(91)

169,030

(11,454)

 

 

____

____

______

_____

 

 

Hotels

Rooms

Global pipeline signings

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Total

356

-

53,812

(1,612)

 

 

____

____

______

_____

 

* Includes nil Holiday Inn Club Vacations (nil rooms) and 12 Holiday Inn Resort properties (2,390 rooms) (2011: 1 Holiday Inn Club Vacations (658 rooms) and 15 Holiday Inn Resort properties (3,037 rooms)).

 

Global pipeline

At the end of 2012, the pipeline totalled 1,053 hotels (169,030 rooms). The IHG pipeline represents hotels and rooms where a contract has been signed and the appropriate fees paid. The continued global demand for IHG brands is demonstrated by over 50% of pipeline rooms being outside of The Americas region, including 30% in Greater China.

 

Excluding 25 hotels (4,796 rooms) signed as part of the US government's Privatization of Army Lodgings initiative in 2011, signings increased from 331 hotels (50,628 rooms) to 356 hotels (53,812 rooms). Signings during 2012 included 15 hotels for the HUALUXE Hotels & Resorts brand, as well as the first signing for the EVEN Hotels brand.

 

During 2012, the opening of 33,922 rooms contributed to a net pipeline decline of 11,454 rooms. Active management out of the pipeline of deals that have become dormant or no longer viable reduced the pipeline by 31,344 rooms, representing a decrease of 11.8% over 2011.

 

 

 

THE AMERICAS

 

12 months ended 31 December

 

2012

2011

%

Americas Results

$m

$m

change

 

 

 

 

Revenue

 

 

 

 

Franchised

541

502

7.8

 

Managed

97

124

(21.8)

 

Owned and leased

199

204

(2.5)

 

____

____

____

Total

 

837

830

0.8

 

____

____

____

Operating profit before exceptional items

 

 

 

 

Franchised

466

431

8.1

 

Managed

48

52

(7.7)

 

Owned and leased

24

17

41.2

 

 

____

____

_____

 

538

500

7.6

Regional overheads

(52)

(49)

(6.1)

 

____

____

____

Total

 

486

451

7.8

 

____

____

____

 

 

 

 

Americas Comparable RevPAR movement on previous year

12 months ended

31 December

2012

 

 

Franchised

 

 

Crowne Plaza

5.4%

 

Holiday Inn

5.9%

 

Holiday Inn Express

6.1%

 

All brands

6.0%

Managed

 

 

InterContinental

10.5%

 

Crowne Plaza

3.8%

 

Holiday Inn

9.6%

 

Staybridge Suites

(1.7)%

 

Candlewood Suites

(0.8)%

 

All brands

7.3%

Owned and leased

 

 

All brands

6.3%

 

 

 

Americas results

Revenue and operating profit before exceptional items increased by $7m (0.8%) to $837m and by $35m (7.8%) to $486m respectively. RevPAR increased 6.1%, with 4.1% growth in average daily rate. US RevPAR was up 6.3% in 2012 despite uncertainty regarding the presidential election and the 'fiscal cliff' in the latter part of the year.

 

Franchised revenue increased by $39m (7.8%) to $541m. Royalties growth of 8.7% was driven by RevPAR growth of 6.0%, including 6.1% for Holiday Inn Express, together with system size growth of 2.3%. Operating profit increased by $35m (8.1%) to $466m.

 

Managed revenue decreased by $27m (21.8%) to $97m and operating profit decreased by $4m (7.7%) to $48m. Revenue and operating profit included $34m (2011 $59m) and $nil (2011 $1m) respectively from managed leases. Excluding properties operated under this arrangement, as well as the benefit of a $3m liquidated damages receipt in 2012 and a $10m liquidated damages receipt in 2011, revenue and operating profit grew by $5m (9.1%) and $4m (9.8%) respectively. Growth was driven by a RevPAR increase of 7.3%, including 9.6% for Holiday Inn.

 

Owned and leased revenue declined by $5m (2.5%) to $199m and operating profit grew by $7m (41.2%) to $24m. Excluding the impact of disposals, revenue increased by $4m (2.1%) and operating profit increased by $8m (50.0%). The increase in revenue was driven by RevPAR growth of 6.3%, offset by the impact of the partial closure of an owned hotel in the Caribbean. The operating profit increase of $7m included a $1m year-on-year benefit from lower depreciation recorded for the InterContinental New York Barclay since the hotel was categorised as 'held for sale' in the first quarter of 2011, after which no depreciation was charged, and a $3m year-on-year benefit relating to one off reorganisation costs at one hotel in 2011.

 

 

Hotels

Rooms

Americas hotel and room count

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

53

1

17,756

158

 

Crowne Plaza

183

(5)

48,730

(1,272)

 

Holiday Inn*

820

4

146,661

840

 

Holiday Inn Express

1,931

57

168,398

5,463

 

Staybridge Suites

183

9

19,787

967

 

Candlewood Suites

299

14

28,675

1,175

 

Hotel Indigo

37

4

4,307

334

 

Other

49

(2)

15,303

(246)

 

 

____

____

______

_____

Total

3,555

82

449,617

7,419

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

3,354

88

407,849

9,169

 

Managed

196

(5)

39,583

(1,639)

 

Owned and leased

5

(1)

2,185

(111)

 

 

____

____

______

_____

Total

3,555

82

449,617

7,419

 

 

____

____

______

_____

 

* Includes 10 Holiday Inn Club Vacations (3,701 rooms) and 17 Holiday Inn Resort properties (4,240 rooms) (2011: 7 Holiday Inn Club Vacations (2,928 rooms) and 14 Holiday Inn Resort properties (3,658 rooms)).

 

Americas hotel and room count

The Americas hotel and room count in the year increased by 82 hotels (7,419 rooms) to 3,555 hotels (449,617 rooms). Openings of 148 hotels (16,618 rooms) included 113 Holiday Inn brand family hotels (12,566 rooms), representing more than 70% of openings for the region. Six Hotel Indigo openings (639 rooms) helped the brand reach the 50 property milestone globally by the end of 2012. 22 hotels (1,927 rooms) opened as Staybridge Suites hotels and Candlewood Suites hotels, IHG's extended stay brands. 66 hotels (9,199 rooms) were removed from the system in 2012, compared to 153 hotels (24,284 rooms) in 2011

 

 

Hotels

Rooms

Americas pipeline

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

4

(1)

925

(415)

 

Crowne Plaza

16

(6)

3,737

(1,512)

 

Holiday Inn*

139

(19)

18,827

(3,224)

 

Holiday Inn Express

345

(27)

32,388

(1,972)

 

Staybridge Suites

64

(22)

6,648

(2,247)

 

Candlewood Suites

78

(16)

6,742

(1,320)

 

Hotel Indigo

23

(15)

3,076

(1,417)

 

EVEN

1

1

230

230

 

 

____

____

______

_____

Total

670

(105)

72,573

(11,877)

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

659

(106)

70,290

(11,997)

 

Managed

11

1

2,283

120

 

 

____

____

______

_____

Total

670

(105)

72,573

(11,877)

 

 

____

____

______

_____

 

* Includes nil Holiday Inn Club Vacations (nil rooms) and 5 Holiday Inn Resort properties (640 rooms) (2011: 1 Holiday Inn Club Vacations (658 rooms) and 6 Holiday Inn Resort properties (669 rooms)).

 

Americas pipeline

The Americas pipeline totalled 670 hotels (72,573 rooms) as at 31 December 2012. Signings of 226 hotels (25,536 rooms) included 173 hotels (18,866 rooms) in the Holiday Inn brand family as well as the first signing for the EVEN Hotels brand, a flagship property in the heart of midtown Manhattan, New York City. The pipeline decreased by 105 hotels (11,877 rooms) compared to 2011.

 

 

EUROPE

 

12 months ended 31 December

 

2012

2011

%

Europe results

$m

$m

change

 

 

 

 

Revenue

 

 

 

 

Franchised

91

86

5.8

 

Managed

147

118

24.6

 

Owned and leased

198

201

(1.5)

 

____

____

____

Total

 

436

405

7.7

 

____

____

____

Operating profit before exceptional items

 

 

 

 

Franchised

65

65

-

 

Managed

32

26

23.1

 

Owned and leased

50

49

2.0

 

 

____

____

_____

 

147

140

5.0

Regional overheads

(32)

(36)

11.1

 

____

____

____

Total

 

115

104

10.6

 

____

____

____

 

 

 

 

Europe comparable RevPAR movement on previous year

12 months ended

31 December

2012

 

 

Franchised

 

 

All brands

1.8%

Managed

 

 

All brands

1.0%

Owned and leased

 

 

InterContinental

5.2%

 

 

Europe results

Revenue and operating profit before exceptional items increased by $31m (7.7%) to $436m and by $11m (10.6%) to $115m respectively. RevPAR increased by 1.7%, with 1.2% growth in average daily rate despite challenging economic conditions across Europe.

 

Franchised revenue increased by $5m (5.8%) to $91m, whilst operating profit was flat at $65m. At constant currency, revenue increased by $8m (9.3%) and operating profit increased by $3m (4.6%). Growth was mainly driven by an increase in royalties of 2.7% (7.5% at constant currency) reflecting RevPAR growth of 1.8%, together with system size growth of 4.0%.

 

Managed revenue increased by $29m to $147m (24.6%) and operating profit increased by $6m (23.1%) to $32m. Revenue and operating profit included $80m (2011 $46m) and $2m (2011 $nil) respectively from managed leases. Excluding properties operated under this arrangement and on a constant currency basis, revenue decreased by $1m (1.4%) reflecting a 4.3% decrease in system size partially offset by RevPAR growth of 1.0%. On the same basis, operating profit grew by $5m (19.2%).

 

In the owned and leased estate, revenue decreased by $3m (1.5%) to $198m and operating profit increased by $1m (2.0%) to $50m. At constant currency and excluding the impact of disposals, revenue increased by $10m (5.1%) and operating profit increased by $4m (8.3%). The InterContinental London Park Lane and the InterContinental Paris Le Grand delivered year-on-year RevPAR growth of 8.0% and 2.5% respectively.

 

 

 

 

Hotels

Rooms

Europe hotel and room count

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

30

-

9,394

(270)

 

Crowne Plaza

84

(2)

19,566

(159)

 

Holiday Inn*

288

(2)

46,610

145

 

Holiday Inn Express

212

14

24,903

1,722

 

Staybridge Suites

4

1

605

162

 

Hotel Indigo

10

5

949

542

 

 

____

____

______

_____

Total

628

16

102,027

2,142

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

528

19

79,899

3,088

 

Managed

98

(3)

21,211

(946)

 

Owned and leased

2

-

917

-

 

 

____

____

______

_____

Total

628

16

102,027

2,142

 

 

____

____

______

_____

 

 

 

 

 

 

 

* Includes 3 Holiday Inn Resort properties (362 rooms) (2011: 3 Holiday Inn Resort properties (362 rooms)).

 

Europe hotel and room count

During 2012, Europe system size increased by 16 hotels (2,142 rooms) to 628 hotels (102,027 rooms). Openings of 39 hotels (5,477 rooms) included 31 hotels in the Holiday Inn brand family (4,233 rooms). Hotel Indigo continued to build momentum in the region with five hotel openings, doubling the system size in Europe for the brand. 23 hotels (3,335 rooms) were removed from the system in 2012.

 

 

Hotels

Rooms

Europe pipeline 

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

2

(3)

404

(906)

 

Crowne Plaza

12

-

2,769

(184)

 

Holiday Inn

20

(5)

4,267

(672)

 

Holiday Inn Express

43

-

6,284

342

 

Staybridge Suites

1

(1)

168

(115)

 

Hotel Indigo

13

2

1,292

37

 

 

____

____

______

_____

Total

91

(7)

15,184

(1,498)

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

83

1

12,186

187

 

Managed

8

(8)

2,998

(1,685)

 

 

____

____

______

_____

Total

91

(7)

15,184

(1,498)

 

 

____

____

______

_____

 

Europe pipeline

The Europe pipeline totalled 91 hotels (15,184 rooms) as at 31 December 2012. Signings of 48 hotels (7,023 rooms) increased from 2011 levels and included 35 hotels (5,489 rooms) in the Holiday Inn brand family, including the first two Holiday Inn Express hotels in Russia. Seven Hotel Indigo hotels (572 rooms) were signed, including three more hotels in the UK and firsts for the brand in France, Spain and Israel. 16 hotels (3,044 rooms) were removed from the pipeline in 2012. The pipeline decreased by seven hotels (1,498 rooms) compared to 2011. 

 

 

ASIA, MIDDLE EAST & AFRICA (AMEA)

 

12 months ended 31 December

 

2012

2011

%

AMEA results

$m

$m

change

 

 

 

 

Revenue

 

 

 

 

Franchised

18

19

(5.3)

 

Managed

152

151

0.7

 

Owned and leased

48

46

4.3

 

 

____

____

_____

Total

 

218

216

0.9

 

____

____

____

Operating profit before exceptional items

 

 

 

 

Franchised

12

12

-

 

Managed

90

87

3.4

 

Owned and leased

6

5

20.0

 

 

____

____

_____

 

108

104

3.8

Regional overheads

(20)

(20)

-

 

____

____

____

Total

 

88

84

4.8

 

____

____

_____

 

 

AMEA comparable RevPAR movement on previous year

12 months ended

31 December

2012

 

 

Franchised

 

 

All Brands

7.2%

Managed

 

 

All Bands

4.6%

 

 

AMEA results

Revenue and operating profit before exceptional items increased by $2m (0.9%) to $218m and by $4m (4.8%) to $88m respectively. RevPAR increased 4.9%, with 1.2% growth in average daily rate, with robust trading in South East Asia and Japan, partly offset by continuing uncertainty impacting some markets in the Middle East.

 

On both a constant and actual currency basis, franchised revenue decreased by $1m (5.3%) to $18m and operating profit was flat at $12m.

 

Managed revenue and operating profit increased by $1m (0.7%) to $152m and by $3m (3.4%) to $90m respectively. At constant currency, excluding the benefit of a $6m liquidated damages receipt in 2011 and after adjusting for the disposal of a hotel asset and partnership interest in Australia, which contributed $3m to operating profit in 2011, revenue and operating profit increased by $7m (4.8%) and $11m (14.1%) respectively. RevPAR growth was 4.6% and although year-end system size was 7.1% higher than at the end of 2011, due to the phasing of openings towards the end of the year, rooms available during the year grew by only 2.2%. Operating profit in 2012 benefited from a $1m increase in profit from an associate and $2m lower year-on-year bad debt expenses.

 

In the owned and leased estate, revenue and operating profit increased by $2m (4.3%) to $48m and by $1m (20.0%) to $6m respectively.

 

 

 

 

Hotels

Rooms

AMEA hotel and room count

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

65

1

20,791

366

 

Crowne Plaza

65

4

18,559

1,638

 

Holiday Inn*

75

(2)

17,440

(592)

 

Holiday Inn Express

12

4

2,877

1,020

 

Staybridge Suites

2

-

304

-

 

Other

13

(3)

2,766

(778)

 

 

____

____

______

_____

Total

232

4

62,737

1,654

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

48

(6)

10,860

(1,757)

 

Managed

182

10

51,290

3,400

 

Owned and leased

2

-

587

11

 

 

____

____

______

_____

Total

232

4

62,737

1,654

 

 

____

____

______

_____

 

* Includes 14 Holiday Inn Resort properties (3,311 rooms) (2011: 13 Holiday Inn Resort properties (3,121 rooms)).

 

AMEA hotel and room count

The AMEA hotel and room count in the year increased by four hotels (1,654 rooms) to 232 hotels (62,737 rooms). The level of openings increased from 10 hotels (2,907 rooms) in 2011 to 16 hotels (4,243 rooms) in 2012. These included four hotels for the InterContinental brand, including the 197 room InterContinental Danang Sun Peninsula Resort in Vietnam, as well as the first Holiday Inn Express hotels in Bahrain and Thailand. Six Crowne Plaza hotels (1,777 rooms) were opened in 2012, including resort locations in Thailand and Jordan. 12 hotels (2,589 rooms) were removed from the system in 2012.

 

 

Hotels

Rooms

AMEA pipeline

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

20

1

5,366

272

 

Crowne Plaza

18

(3)

5,345

(1,384)

 

Holiday Inn*

47

4

10,895

515

 

Holiday Inn Express

35

8

7,091

1,410

 

Staybridge Suites

6

(1)

728

(120)

 

Other

6

1

932

80

 

 

____

____

______

_____

Total

132

10

30,357

773

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

2

(2)

425

(427)

 

Managed

130

12

29,932

1,200

 

 

____

____

______

_____

Total

132

10

30,357

773

 

 

____

____

______

_____

 

* Includes 4 Holiday Inn Resort properties (900 rooms) (2011: 4 Holiday Inn Resort properties (900 rooms)).

 

AMEA pipeline

The AMEA pipeline totalled 132 hotels (30,357 rooms) as at 31 December 2012. Signings of 36 hotels (7,866 rooms) included 24 hotels (4,657 rooms) in the Holiday Inn brand family. In addition, six InterContinental hotels (1,728 rooms) were signed, including resort locations in Thailand and Australia. 10 hotels (2,850 rooms) were removed from the pipeline in 2012, compared to 32 hotels (8,243 rooms) in 2011. The pipeline increased by 10 hotels (773 rooms) compared to 2011.

 

 

GREATER CHINA

 

12 months ended 31 December

 

2012

2011

%

Greater China results

$m

$m

change

 

 

 

 

Revenue

 

 

 

 

Franchised

3

2

50.0

 

Managed

89

77

15.6

 

Owned and leased

138

126

9.5

 

 

____

____

_____

Total

 

230

205

12.2

 

____

____

____

Operating profit before exceptional items

 

 

 

 

Franchised

4

3

33.3

 

Managed

51

43

18.6

 

Owned and leased

45

37

21.6

 

 

____

____

_____

 

100

83

20.5

Regional overheads

(19)

(16)

(18.8)

 

____

____

____

Total

 

81

67

20.9

 

____

____

_____

 

 

 

Greater China comparable RevPAR movement on previous year

12 months ended

31 December

2012

 

 

Managed

 

 

All Brands

5.6%

Owned and leased

 

 

InterContinental

6.7%

 

Greater China results

Revenue and operating profit before exceptional items increased by $25m (12.2%) to $230m and by $14m (20.9%) to $81m respectively. RevPAR increased 5.4% with 3.1% growth in average daily rate.

 

Franchised revenue increased by $1m (50.0%) to $3m and operating profit by $1m (33.3%) to $4m, boosted by the opening of the 1,224 room Holiday Inn Macao Cotai Central.

 

Managed revenue increased by $12m (15.6%) to $89m and operating profit increased by $8m (18.6%) to $51m. RevPAR growth of 5.6% reflected continued economic growth in the region, although the whole industry was affected in the latter part of the year by the once in a decade political leadership change and the Diaoyu/Senkaku islands territorial dispute. There was also continued significant system size growth for the managed estate in the region (9.7% rooms growth in 2012 following 14.2% rooms growth in 2011).

 

Owned and leased revenue increased by $12m (9.5%) to $138m and operating profit increased by $8m (21.6%) to $45m, with RevPAR growth of 6.7% at the InterContinental Hong Kong.

 

Regional costs increased by $3m (18.8%) to $19m reflecting increased investment in operations and infrastructure in the region.

 

 

 

 

Hotels

Rooms

Greater China hotel and room count

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

22

(1)

9,373

(538)

 

Crowne Plaza

60

8

21,452

2,996

 

Holiday Inn*

64

7

20,777

2,839

 

Holiday Inn Express

37

3

9,453

760

 

Hotel Indigo

3

2

405

221

 

Other

1

1

141

141

 

 

____

____

______

_____

Total

187

20

61,601

6,419

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

4

1

2,184

1,221

 

Managed

182

19

58,914

5,190

 

Owned and leased

1

-

503

8

 

 

____

____

______

_____

Total

187

20

61,601

6,419

 

 

____

____

______

_____

 

* Includes 3 Holiday Inn Resort properties (893 rooms) (2011: 2 Holiday Inn Resort properties (668 rooms)).

 

Greater China hotel and room count

The Greater China hotel and room count in the year increased by 20 hotels (6,419 rooms) to 187 hotels (61,601 rooms). Openings of 23 hotels (7,584 rooms) included the Holiday Inn Macao Cotai Central (1,224 rooms), the largest Holiday Inn in the world. Eight Crowne Plaza hotels (2,996 rooms) and two Hotel Indigo hotels (224 rooms) were opened in 2012.

 

 

Hotels

Rooms

Greater China pipeline

at 31 December

 

2012

Change

over 2011

 

2012

Change

over 2011

 

 

 

 

 

Analysed by brand

 

 

 

 

 

InterContinental

22

-

9,018

(861)

 

Crowne Plaza

52

(1)

19,332

(380)

 

Holiday Inn*

37

(4)

10,999

(2,381)

 

Holiday Inn Express

29

1

5,997

(221)

 

Hotel Indigo

5

-

569

(10)

 

HUALUXE

15

15

4,904

4,904

 

Other

-

-

97

97

 

 

____

____

______

_____

Total

160

11

50,916

1,148

 

 

____

____

______

_____

Analysed by ownership type

 

 

 

 

 

Franchised

-

(2)

-

(1,375)

 

Managed

160

13

50,916

2,523

 

 

____

____

______

_____

Total

160

11

50,916

1,148

 

 

____

____

______

_____

 

* Includes 3 Holiday Inn Resort properties (850 rooms) (2011: 5 Holiday Inn Resort properties (1,468 rooms)).

 

Greater China pipeline

The Greater China pipeline totalled 160 hotels (50,916 rooms) as at 31 December 2012. Signings of 46 hotels (13,387 rooms) increased from 38 hotels (12,112 rooms) in 2011 and included 15 hotels for the newly launched HUALUXE Hotels & Resorts brand, together with 12 Crowne Plaza hotels (4,527 rooms). 12 hotels (4,655 rooms) were removed from the pipeline in 2012. The pipeline increased by 11 hotels (1,148 rooms) compared to 2011.

 

  

Central

 

12 months ended 31 December

 

2012

2011

%

Central results

$m

$m

change

 

 

 

 

Revenue

114

112

1.8

Gross central costs

(270)

(259)

(4.2)

 

____

____

_____

Net central costs

 

(156)

(147)

(6.1)

 

_____

_____

_____

 

Central Results

Net central costs increased by $9m (6.1%) from $147m in 2011 to $156m in 2012. At constant currency, net central costs increased by $11m (7.5%). The movement was driven by investment in infrastructure and capabilities to support the growth of the business. Central revenue mainly comprised technology fee income.

 

SYSTEM FUND

 

12 months ended 31 December

 

2012

2011

%

System Fund results

$m

$m

change

 

 

 

 

Assessment fees and contributions received from hotels

1,106

1,025

7.9

Proceeds from sale of Priority Club Rewards points

144

128

12.5

 

____

____

_____

 

 

1,250

1,153

8.4

 

_____

____

_____

 

In the year to 31 December 2012, System Fund (the Fund) income increased by 8.4% to $1,250m primarily as a result of growth in hotel room revenues. The increase in proceeds from the sale of Priority Club Rewards points mainly reflects the strong performance of co-brand credit card schemes.

 

In addition to management or franchise fees, hotels within the IHG system pay assessments and contributions which are collected by IHG for specific use within the Fund. The Fund also receives proceeds from the sale of Priority Club Rewards points. The Fund is managed for the benefit of hotels in the system with the objective of driving revenues for the hotels.

 

The Fund is used to pay for marketing, the Priority Club Rewards loyalty programme and the global reservation system. The operation of the Fund does not result in a profit or loss for the Group and consequently the revenues and expenses of the Fund are not included in the Group Income Statement.

  

 

OTHER FINANCIAL INFORMATION

 

Exceptional operating items

Exceptional operating items totalled a net loss of $4m. Exceptional gains included a $23m impairment reversal and the release of a $9m liability no longer required relating to the demerger of the Group from Six Continents PLC. Exceptional charges included $16m from the reorganisation of the Group's support functions together with a restructuring in the AMEA region, $2m loss on disposal of an interest in a hotel and $18m write-off of software.

Exceptional operating items are treated as exceptional by reason of their size or nature and are excluded from the calculation of adjusted earnings per ordinary share in order to provide a more meaningful comparison of performance.

 

Net financial expenses

Net financial expenses decreased by $8m to $54m primarily due to lower average debt levels.

Financing costs included $2m (2011 $1m) of interest costs associated with Priority Club Rewards where interest is charged on the accumulated balance of cash received in advance of the redemption points awarded.  Financing costs in 2012 also included $19m (2011 $18m) in respect of the InterContinental Boston finance lease.

 

Taxation

The effective rate of tax on operating profit, excluding the impact of exceptional items, was 27% (2011 24%). Excluding the impact of prior year items the equivalent tax rate would be 30% (2011 36%). This rate is higher than the average UK statutory rate of 24.5% due mainly to certain overseas profits (particularly in the US) being subject to statutory rates higher than the UK statutory rate, unrelieved foreign taxes and disallowable expenses.

 

Taxation within exceptional items totalled a credit of $142m (2011 $48m). This represented, primarily, the recognition of $104m of deferred tax assets whose value has become more certain as a result of a change in law and the resolution of prior period tax matters, together with the associated release of $37m of provisions. In 2011, the credit mainly related to a revision of the estimated tax impacts of an internal reorganisation completed in 2010.

 

Net tax paid in 2012 totalled $122m (2011 $90m) including $3m paid (2011 $1m) in respect of disposals. Tax paid represents an effective rate of 22% (2011 17%) on total profits and is lower than the effective income statement tax rate of 27% primarily due to the impact of deferred taxes (including the realisation of assets such as tax losses), the receipt of refunds in respect of prior years and provisions for tax for which no payment of tax has currently been made.

 

Earnings per ordinary share

Basic earnings per ordinary share in 2012 was 189.5¢, compared with 159.2¢ in 2011. Adjusted earnings per ordinary share was 141.5¢, against 130.4¢ in 2011.

 

Dividends

The Board has proposed a final dividend per ordinary share of 43.0¢ (27.7p). With the interim dividend per ordinary share of 21.0¢ (13.5p), the full-year dividend per ordinary share for 2012 will total 64.0¢ (41.2p), an increase of 16% over 2011. On 22 October 2012, a special dividend of $1.72 (108.4p) per ordinary share was paid to shareholders.

 

Share price and market capitalisation

The IHG share price closed at £17.07 on 31 December 2012, up from £11.57 on 31 December 2011. The market capitalisation of the Group at the year-end was £4.6bn.

 

Capital structure and liquidity management

During the year, $472m of cash was generated from operating activities, of which $133m was invested in capital expenditure. After shareholder returns of $786m, including a $505m special dividend and $107m of share buy-backs, net debt

at 31 December 2012 was $1,074m, an increase over the year of $536m. Net debt included $212m in respect of the finance lease obligations for the InterContinental Boston and $11m in respect of currency swaps related to the £250m sterling bond.

 

In November 2012, the Group issued a 10-year £400m public bond under its Medium Term Notes programme. The bond has a coupon of 3.875% and extends the maturity profile and diversifies the sources of the Group's debt. The Group issued its first bond under the programme in December 2009 which was a £250m seven-year public bond at a coupon of 6%, which was immediately swapped into US dollar debt using currency swaps.

 

The Group refinanced its bank debt in November 2011, putting in place a five-year $1.07bn syndicated bank facility which matures in November 2016. This facility was undrawn at the year-end.

 

Additional funding is provided by a finance lease on the InterContinental Boston.

 

 

2012

2011

Net debt* at 31 December

$m

$m

 

 

 

Borrowings:

 

 

 

Sterling

638

-

 

US Dollar

626

715

 

Other

5

5

Cash and cash equivalents

(195)

(182)

 

____

____

Net debt

1,074

538

 

____

____

 

 

 

Average debt levels

651

721

 

____

____

 

 

 

* Including the impact of currency derivatives.

 

2012

2011

Facilities at 31 December

$m

$m

 

 

 

Committed

1,075

1,075

Uncommitted

96

79

 

____

____

Total

1,171

1,154

 

____

____

 

 

Interest risk profile of gross debt for major currencies

at 31 December

2012

%

2011

%

 

 

 

At fixed rates

100

100

 

 

 

 

  

 

InterContinental Hotels Group PLC

GROUP INCOME STATEMENT

For the year ended 31 December 2012

 

 

Year ended 31 December 2012

Year ended 31 December 2011

 

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)

1,835

-

1,835

1,768

-

1,768

Cost of sales

(772)

-

(772)

(771)

-

(771)

Administrative expenses

(363)

(16)

(379)

(350)

(31)

(381)

Other operating income and expenses

8

(11)

(3)

11

46

57

 

_____

____

____

_____

____

____

 

708

(27)

681

658

15

673

 

 

 

 

 

 

 

Depreciation and amortisation

(94)

-

(94)

(99)

-

(99)

Impairment

-

23

23

-

20

20

 

_____

____

____

_____

____

____

 

 

 

 

 

 

 

Operating profit (note 3)

614

(4)

610

559

35

594

Financial income

3

-

3

2

-

2

Financial expenses

(57)

-

(57)

(64)

-

(64)

 

_____

____

____

_____

____

____

 

 

 

 

 

 

 

Profit before tax

560

(4)

556

497

35

532

 

 

 

 

 

 

 

Tax (note 5)

(153)

142

(11)

(120)

48

(72)

 

_____

____

____

_____

____

____

Profit for the year from continuing operations

 

407

 

138

 

545

 

377

 

83

 

460

 

====

====

====

====

====

====

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

Equity holders of the parent

406

138

544

377

83

460

 

Non-controlling interest

1

-

1

-

-

-

 

 

____

____

____

____

____

____

 

 

407

138

545

377

83

460

 

====

====

====

====

====

====

 

 

 

 

 

 

 

Earnings per ordinary share

(note 6)

 

 

 

 

 

 

Continuing and total operations:

 

 

 

 

 

 

 

Basic

 

 

189.5¢

 

 

159.2¢

 

Diluted

 

 

186.3¢

 

 

155.4¢

 

Adjusted

141.5¢

 

 

130.4¢

 

 

 

Adjusted diluted

139.0¢

 

 

127.4¢

 

 

 

====

 

====

====

 

====

 

 

 

 

 

 

 

 

InterContinental Hotels Group PLC

GROUP STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2012

 

 

2012

Year ended

31 December

$m

2011

Year ended

31 December

$m

 

 

 

Profit for the year

545

460

 

 

 

Other comprehensive income

 

 

Available-for-sale financial assets:

 

 

 

Gains on valuation

1

15

 

Losses reclassified to income on impairment

-

3

Cash flow hedges:

 

 

 

Reclassified to financial expenses

1

4

Defined benefit pension plans:

 

 

 

Actuarial gains/(losses), net of related tax charge of $1m (2011 credit of $13m)

-

(19)

 

Change in asset restriction on plans in surplus and liability in respect of funding commitments, net of related tax credit of $7m (2011 $7m)

 

(18)

 

(4)

Exchange differences on retranslation of foreign operations, including related tax credit of $3m (2011 charge of $3m)

 

24

 

(21)

Tax related to pension contributions

19

2

 

____

____

Other comprehensive income/(loss) for the year

27

(20)

 

____

____

Total comprehensive income for the year

572

440

 

====

====

 

 

 

Attributable to:

 

 

 

Equity holders of the parent

571

439

 

Non-controlling interest

1

1

 

_____

_____

 

572

440

 

=====

=====

 

 

InterContinental Hotels Group PLC

GROUP STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2012

 

 

Year ended 31 December 2012

 

Equity share capital

Other reserves*

Retained earnings

Non-controlling interest

 

Total equity

 

$m

$m

$m

$m

$m

 

 

 

 

 

 

At beginning of the year

162

(2,650)

3,035

8

555

 

 

 

 

 

 

Total comprehensive income for the year

-

26

545

1

572

Issue of ordinary shares

10

-

-

-

10

Repurchase of shares

(1)

-

(106)

-

(107)

Transfer to capital redemption reserve

-

1

(1)

-

-

Transaction costs relating to shareholder returns

 

-

 

-

 

(2)

 

-

 

(2)

Movement in shares in employee share trusts

 

-

 

(21)

 

(63)

 

-

 

(84)

Equity-settled share-based cost

-

-

27

-

27

Tax related to share schemes

-

-

20

-

20

Equity dividends paid

-

-

(679)

-

(679)

Share of reserve in equity accounted investment

 

-

 

-

 

5

 

-

 

5

Exchange adjustments

8

(8)

-

-

-

 

_____

_____

____

____

____

At end of the year

179

(2,652)

2,781

9

317

 

=====

=====

====

====

====

 

 

Year ended 31 December 2011

 

Equity share capital

Other reserves*

Retained earnings

Non-controlling interest

 

Total equity

 

$m

$m

$m

$m

$m

 

 

 

 

 

 

At beginning of the year

155

(2,659)

2,788

7

291

 

 

 

 

 

 

Total comprehensive income for the year

-

-

439

1

440

Issue of ordinary shares

8

-

-

-

8

Movement in shares in employee share trusts

 

-

 

8

 

(80)

 

-

 

(72)

Equity-settled share-based cost

-

-

29

-

29

Tax related to share schemes

-

-

7

-

7

Equity dividends paid

-

-

(148)

-

(148)

Exchange adjustments

(1)

1

-

-

-

 

_____

_____

____

____

____

At end of the year

162

(2,650)

3,035

8

555

 

=====

=====

====

====

====

 

 

*

Other reserves comprise the capital redemption reserve, shares held by employee share trusts, other reserves, unrealised gains and losses reserve and currency translation reserve.

 

 

 

InterContinental Hotels Group PLC

GROUP STATEMENT OF FINANCIAL POSITION

31 December 2012


2012

31 December

2011

31 December


$m

$m

ASSETS



Property, plant and equipment

1,056

1,362

Goodwill

93

92

Intangible assets

354

308

Investment in associates and joint ventures

84

87

Retirement benefit assets

99

21

Other financial assets

155

156

Non-current tax receivable

24

41

Deferred tax assets

204

106


_____

_____

Total non-current assets

2,069

2,173


_____

_____

Inventories

4

4

Trade and other receivables

422

369

Current tax receivable

31

20

Derivative financial instruments

2

3

Other financial assets

6

-

Cash and cash equivalents

195

182


_____

_____

Total current assets

660

578

Non-current assets classified as held for sale

534

217


______

______

Total assets (note 3)

3,263

2,968


=====

=====

LIABILITIES



Loans and other borrowings

(16)

(21)

Trade and other payables

(709)

(707)

Provisions

(1)

(12)

Current tax payable

(54)

(120)


_____

_____

Total current liabilities

(780)

(860)


_____

_____

Loans and other borrowings

(1,242)

(670)

Derivative financial instruments

(19)

(39)

Retirement benefit obligations

(187)

(188)

Trade and other payables

(563)

(497)

Provisions

(1)

(2)

Deferred tax liabilities

(93)

(97)


_____

_____

Total non-current liabilities

(2,105)

(1,493)

Liabilities classified as held for sale

(61)

(60)


_____

_____

Total liabilities

(2,946)

(2,413)


=====

=====

Net assets

317

555


=====

=====

EQUITY



Equity share capital

179

162

Capital redemption reserve

11

10

Shares held by employee share trusts

(48)

(27)

Other reserves

(2,901)

(2,893)

Unrealised gains and losses reserve

72

71

Currency translation reserve

214

189

Retained earnings

2,781

3,035


______

______

IHG shareholders' equity

308

547

Non-controlling interest

9

8


______

______

Total equity

317

555


=====

=====



InterContinental Hotels Group PLC

GROUP STATEMENT OF CASH FLOWS

For the year ended 31 December 2012

 

 

2012

Year ended

31 December

2011

Year ended

31 December

 

$m

$m

 

 

 

Profit for the year

545

460

Adjustments for:

 

 

 

Net financial expenses

54

62

 

Income tax charge

11

72

 

Depreciation and amortisation

94

99

 

Impairment

(23)

(20)

 

Other exceptional operating items

27

(15)

 

Equity-settled share-based cost

22

25

 

Other items

(2)

-

 

_____

_____

Operating cash flow before movements in working capital

728

683

Net change in loyalty programme liability and System Fund surplus

57

66

Other changes in net working capital

(24)

(31)

Utilisation of provisions

(12)

(19)

Retirement benefit contributions, net of cost

(104)

(44)

Cash flows relating to exceptional operating items

(6)

(32)

 

_____

_____

Cash flow from operations

639

623

Interest paid

(50)

(56)

Interest received

2

1

Tax paid on operating activities

(119)

(89)

 

_____

_____

Net cash from operating activities

472

479

 

_____

_____

Cash flow from investing activities

 

 

Purchase of property, plant and equipment

(44)

(55)

Purchase of intangible assets

(84)

(48)

Investment in other financial assets

(2)

(50)

Investment in associates and joint ventures

(3)

(41)

Disposal of assets, net of costs

4

142

Proceeds from other financial assets

4

15

Tax paid on disposals

(3)

(1)

 

_____

_____

Net cash from investing activities

(128)

(38)

 

_____

_____

Cash flow from financing activities

 

 

Proceeds from the issue of share capital

10

8

Purchase of own shares

(107)

-

Purchase of own shares by employee share trusts

(84)

(75)

Dividends paid to shareholders

(679)

(148)

Transaction costs relating to shareholder returns

(2)

-

Issue of long-term bonds

632

-

Decrease in other borrowings

(99)

(119)

 

_____

_____

Net cash from financing activities

(329)

(334)

 

_____

_____

Net movement in cash and cash equivalents in the year

15

107

Cash and cash equivalents at beginning of the year

182

78

Exchange rate effects

(2)

(3)

 

_____

_____

Cash and cash equivalents at end of the year

195

182

 

=====

=====



 

InterContinental Hotels Group plc

NOTES TO THE FINANCIAL STATEMENTS

 

 

1.

Basis of preparation

 


The audited consolidated financial statements of InterContinental Hotels Group PLC (the Group or IHG) for the year ended 31 December 2012 have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006. They have been prepared on a consistent basis using the accounting policies set out in the IHG Annual Report and Financial Statements for the year ended 31 December 2011. New accounting standards, amendments and interpretations applicable from 1 January 2012 have not had any impact on the financial statements and there has been no requirement to restate prior year comparatives.

 

 

2.

Exchange rates

 

 

The results of operations have been translated into US dollars at the average rates of exchange for the year. In the case of sterling, the translation rate is $1= £0.63 (2011 $1=£0.62). In the case of the euro, the translation rate is $1 = €0.78 (2011 $1 = €0.72).

 

Assets and liabilities have been translated into US dollars at the rates of exchange on the last day of the year. In the case of sterling, the translation rate is $1=£0.62 (2011 $1 = £0.65). In the case of the euro, the translation rate is $1 = €0.76 (2011 $1 = €0.77).

 

 



 

3.

Segmental information

 

 

 

 

 

 

 

Revenue

 

 

 

 

2012

2011

 

 

$m

$m

 

 

 

 

 

Americas 

837

830

 

Europe  

436

405

 

AMEA

218

216

 

Greater China

230

205

 

Central

114

112

 

 

____

____

 

Total revenue

1,835

1,768

 

 

====

====

 

 

 

 

 

All results relate to continuing operations.

 

 

Profit

2012

$m

2011

$m

 

 

 

 

 

Americas 

486

451

 

Europe  

115

104

 

AMEA

88

84

 

Greater China

81

67

 

Central

(156)

(147)

 

 

____

____

 

Reportable segments' operating profit

614

559

 

Exceptional operating items (note 4)

(4)

35

 

 

____

____

 

Operating profit

610

594

 

 

 

 

 

Financial income

3

2

 

Financial expenses

(57)

(64)

 

 

____

____

 

Profit before tax

556

532

 

 

====

====

 

 

 

 

 

All results relate to continuing operations.

 

 

Assets

2012

$m

2011

$m

 

 

 

 

 

Americas

957

908

 

Europe

928

816

 

AMEA

282

276

 

Greater China

390

388

 

Central

250

228

 

 

____

____

 

Segment assets

2,807

2,616

 

 

 

 

 

Unallocated assets:

 

 

 

Non-current tax receivable

24

41

 

Deferred tax assets

204

106

 

Current tax receivable

31

20

 

Derivative financial instruments

2

3

 

Cash and cash equivalents

195

182

 

 

____

____

 

Total assets

3,263

2,968

 

 

====

====



 

4.

Exceptional items

 

 

 

2012

$m

2011

$m

 

Continuing operations:

 

 

 

Exceptional operating items

 

 

 

 

Administrative expenses:

 

 

 

 

Litigation provision

-

(22)

 

 

Resolution of commercial dispute

-

(37)

 

 

Pension curtailment gain

-

28

 

 

Reorganisation costs (a)

(16)

-

 

 

 

____

____

 

 

 

(16)

(31)

 

 

Other operating income and expenses:

 

 

 

 

(Loss)/gain on disposal of hotels (b)

(2)

37

 

 

Write-off of software (c)

(18)

-

 

 

Demerger liability released (d)

9

-

 

 

VAT refund

-

9

 

 

 

____

____

 

 

 

(11)

46

 

 

Impairment:

 

 

 

 

Impairment charges:

 

 

 

 

 

Property, plant and equipment

-

(2)

 

 

 

Other financial assets

-

(3)

 

 

Reversals of previously recorded impairment:

 

 

 

 

 

Property, plant and equipment (e)

23

23

 

 

 

Associates

-

2

 

 

 

____

____

 

 

 

23

20

 

 

 

____

____

 

 

(4)

35

 

 

====

====

 

Tax

 

 

 

 

Tax on exceptional operating items

1

5

 

 

Exceptional tax credit (f)

141

43

 

 

 

____

____

 

 

 

142

48

 

 

====

====

 

 

 

These items are treated as exceptional by reason of their size or nature.

 

a)

Arises from a reorganisation of the Group's support functions together with a restructuring within the AMEA region.

 

b)

Relates to the sale of an interest in a hotel in the Europe region.

 

c)

Results from a reassessment of the ongoing value of elements of the technology infrastructure.

 

d)

Release of a liability no longer required relating to the demerger of the Group from Six Continents PLC.

 

e)

Relates to the reversal of a previously recorded impairment charge on a North American hotel.

 

f)

Represents the recognition of $104m of deferred tax assets, principally relating to pre-existing overseas tax losses, whose value has become more certain as a result of a change in law and the resolution of prior period tax matters, together with the associated release of $37m of provisions.

 

 

5.

Tax

 

 

The tax charge on profit from continuing operations, excluding the impact of exceptional items (note 4), has been calculated using a tax rate of 27% (2011 24%) analysed as follows.

 

 

 

 

2012

2012

2012

2011

2011

2011

 

Year ended 31 December

Profit

$m

Tax

$m

Tax

rate

Profit

$m

Tax

$m

Tax

rate

 

 

 

 

 

 

 

 

 

Before exceptional items

560

(153)

27%

497

(120)

24%

 

 

 

 

 

 

 

 

 

Exceptional items

(4)

142

 

35

48

 

 

 

____

____

 

____

____

 

 

 

556

(11)

 

532

(72)

 

 

 

====

====

 

====

====

 

 

Analysed as:

 

 

 

 

 

 

 

 

UK tax

 

15

 

 

(8)

 

 

 

Foreign tax

 

(26)

 

 

(64)

 

 

 

 

____

 

 

____

 

 

 

 

(11)

 

 

(72)

 

 

 

 

====

 

 

====

 

 

 

6.

Earnings per ordinary share

 

 

Basic earnings per ordinary share is calculated by dividing the profit for the year available for IHG equity holders by the weighted average number of ordinary shares, excluding investment in own shares, in issue during the year.

 

Diluted earnings per ordinary share is calculated by adjusting basic earnings per ordinary share to reflect the notional exercise of the weighted average number of dilutive ordinary share options outstanding during the year.

 

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

2012

2011

 

 

 

 

 

Basic earnings per ordinary share

 

 

 

Profit available for equity holders ($m)

544

460

 

Basic weighted average number of ordinary shares (millions)

287

289

 

Basic earnings per ordinary share (cents)

189.5

159.2

 

 

====

====

 

Diluted earnings per ordinary share

 

 

 

Profit available for equity holders ($m)

544

460

 

Diluted weighted average number of ordinary shares (millions)

292

296

 

Diluted earnings per ordinary share (cents)

186.3

155.4

 

 

====

====

 

Adjusted earnings per ordinary share

 

 

 

Profit available for equity holders ($m)

544

460

 

Adjusting items (note 4):

 

 

 

 

Exceptional operating items ($m)

4

(35)

 

 

Tax on exceptional operating items ($m)

(1)

(5)

 

 

Exceptional tax credit ($m)

(141)

(43)

 

 

____

____

 

Adjusted earnings ($m)

406

377

 

Basic weighted average number of ordinary shares (millions)

287

289

 

Adjusted earnings per ordinary share (cents)

141.5

130.4

 

 

====

====

 

Diluted weighted average number of ordinary shares (millions)

292

296

 

Adjusted diluted earnings per ordinary share (cents)

139.0

127.4

 

 

====

====

 

 

 

The diluted weighted average number of ordinary shares is calculated as:

 

 

2012

millions

2011

millions

 

 

Basic weighted average number of ordinary shares

287

289

 

Dilutive potential ordinary shares - employee share options

5

7

 

 

____

____

 

 

292

296

 

 

====

====


 

7.

Dividends and shareholder returns

 

 

2012

cents per share

2011

cents per share

2012

$m

2011

$m

 

Paid during the year:

 

 

 

 

 

 

Final (declared for previous year)

39.0

35.2

113

102

 

 

Interim

21.0

16.0

61

46

 

 

Special

172.0

-

505

-

 

 

____

____

____

____

 

 

232.0

51.2

679

148

 

 

====

====

====

====

 

 

 

 

 

 

 

Proposed for approval at the Annual General Meeting

(not recognised as a liability at 31 December)

 

 

Final

43.0

39.0

115

113

 

 

====

====

====

====

 

 

 

 

 

 

 

On 7 August 2012, the Group announced a planned $1bn return to shareholders comprising a $500m special dividend with share consolidation and a $500m share buyback programme.  The share consolidation was approved at a General Meeting of the Company held on 8 October 2012 and the special dividend was paid to shareholders on 22 October 2012 at a total cost of $505m.  The share buyback programme commenced in November 2012 resulting in the repurchase of 4,143,960 shares in the period to 31 December 2012 for a total consideration of $107m. 

 

 

8.

Net debt

 

 

2012

2011

 

 

$m

$m

 

 

 

 

 

Cash and cash equivalents

195

182

 

Loans and other borrowings - current

(16)

(21)

 

Loans and other borrowings - non-current

(1,242)

(670)

 

Derivatives hedging debt values*

(11)

(29)

 

 

____

____

 

Net debt

(1,074)

(538)

 

 

====

====

 

Finance lease liability included above

(212)

(209)

 

 

====

====

 

 

*

Net debt includes the exchange element of the fair value of currency swaps that fix the value of the Group's £250m 6% bonds at $415m.  An equal and opposite exchange adjustment on the retranslation of the £250m 6% bonds is included in non-current loans and other borrowings. 

 

 

9.

Movement in net debt

 

 

 

2012

2011

 

 

$m

$m

 

 

 

 

 

Net increase in cash and cash equivalents

15

107

 

Add back cash flows in respect of other components of net debt:

 

 

 

 

Issue of long-term bonds

(632)

-

 

 

Decrease in other borrowings

99

119

 

 

____

____

 

(Increase)/decrease in net debt arising from cash flows

(518)

226

 

 

 

 

 

Non-cash movements:

 

 

 

 

Finance lease liability

(3)

(3)

 

 

Exchange and other adjustments

(15)

(18)

 

 

____

____

 

(Increase)/decrease in net debt

(536)

205

 

 

 

 

 

Net debt at beginning of the year

(538)

(743)

 

 

____

____

 

Net debt at end of the year

(1,074)

(538)

 

 

====

====

 

 

10.

Commitments and contingencies

 

 

At 31 December 2012, the amount contracted for but not provided for in the financial statements for expenditure on property, plant and equipment and intangible assets was $81m (2011 $14m).  The Group has also committed to invest up to $60m in two investments accounted for under the equity method of which $37m had been spent at 31 December 2012.

 

At 31 December 2012, the Group had contingent liabilities of $1m (2011 $8m).

 

In limited cases, the Group may provide performance guarantees to third-party hotel owners to secure management contracts.  The maximum unprovided exposure under such guarantees is $50m (2011 $42m). 

 

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.  In particular, the Group is currently subject to an Office of Fair Trading enquiry in the UK and class action law suits in the US.  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.

 

 

11.

Events after the reporting period

 

 

On 22 January 2013, the Group announced that it will receive $31m in liquidated damages under an agreement with a hotel owner that will result in eight hotels (2,526 rooms) leaving the IHG System on 1 March 2013.  The payment is expected at the end of February 2013.

 

 

 

12.

Group financial statements

 

 

The preliminary statement of results was approved by the Board on 18 February 2013. The preliminary statement of results does not represent the full Group financial statements of InterContinental Hotels Group PLC and its subsidiaries which will be delivered to the Registrar of Companies in due course. The financial information for the year ended 31 December 2011 has been extracted from the IHG Annual Report and Financial Statements for that year as filed with the Registrar of Companies.

 

 

 

 

Auditor's review

 

 

The auditors, Ernst & Young LLP, have given an unqualified report under Chapter 3 of Part 16 of the Companies Act 2006 in respect of the full Group financial statements.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
FR NKFDKFBKDABD
Close


London Stock Exchange plc is not responsible for and does not check content on this Website. Website users are responsible for checking content. Any news item (including any prospectus) which is addressed solely to the persons and countries specified therein should not be relied upon other than by such persons and/or outside the specified countries. Terms and conditions, including restrictions on use and distribution apply.

 


Final Results - RNS