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IHG Intercontinental Hotels Group Plc

8,278.00
-30.00 (-0.36%)
Last Updated: 08:04:20
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Intercontinental Hotels Group Plc LSE:IHG London Ordinary Share GB00BHJYC057 ORD 20 340/399P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -30.00 -0.36% 8,278.00 8,274.00 8,284.00 8,300.00 8,270.00 8,300.00 2,028 08:04:20
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Hotels And Motels 4.62B 750M 4.5551 18.22 13.66B

InterContinental Hotels Group PLC 1st Quarter Results (0962N)

04/05/2018 7:00am

UK Regulatory


Intercontinental Hotels (LSE:IHG)
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TIDMIHG

RNS Number : 0962N

InterContinental Hotels Group PLC

04 May 2018

4 May 2018

InterContinental Hotels Group PLC

2018 First Quarter Trading Update

 
 Highlights 
--------------------------------------------------------------------------------- 
 
    *    Global Q1 comparable RevPAR[1] up 3.5% 
 
 
    *    4.3% YOY net system size growth to 800k rooms, 8k 
         rooms opened (up 16% YOY) 
 
 
    *    20k rooms signed, strongest Q1 pace for 11 years, led 
         by avid hotels 
 
 
    *    Good progress against new strategic growth 
         initiatives, particularly in expanding our luxury 
         footprint 
 
 
    *    Efficiency programme underway; on track to deliver 
         $125m p.a. in savings to reinvest to drive growth 
--------------------------------------------------------------------------------- 
 Keith Barr, Chief Executive of InterContinental Hotels Group PLC, said: 
--------------------------------------------------------------------------------- 
 "In the first quarter we delivered RevPAR growth of 3.5%, net system 
  size growth of 4.3% and our best signings pace for eleven years. This 
  strong performance reflects our focus on driving industry leading net 
  rooms growth over the medium term, underpinned by our new strategic 
  initiatives. 
  There continues to be strong momentum across the business. We have 
  made excellent progress against our initiative to expand our footprint 
  in the $60 billion luxury segment, announcing the acquisition of a 
  51% stake in Regent Hotels & Resorts in March. In addition, this week 
  we entered into an agreement to rebrand and operate a high-quality 
  portfolio of 13 hotels in the UK. This will establish IHG as the leading 
  luxury operator in this market, launch our luxury boutique brand Kimpton 
  Hotels & Restaurants in the UK, and establish a position for our new 
  upscale brand, principally focused on conversion opportunities. Signings 
  for our new mainstream brand, avid hotels, continue to exceed our expectations, 
  and now total more than 100 hotels, one every other day since launch. 
  Our roll out of IHG Concerto, incorporating our new Guest Reservation 
  System, continues at pace, with more than 1,000 hotels now using the 
  platform, and we are on-track to complete roll-out by the end of 2018 
  / early 2019. 
  The fundamentals for our industry remain strong, we have the right 
  strategy, and we are confident in the outlook for the year ahead." 
--------------------------------------------------------------------------------- 
 First Quarter RevPAR performance 
--------------------------------------------------------------------------------- 
 Group 
  RevPAR was up 3.5%, with rate up 1.9% and occupancy up 1.0%pt. The 
  earlier timing of the Easter weekend, which in 2018 was split evenly 
  between March and April, had a negative impact on RevPAR growth in 
  the Americas and Europe. 
  Americas 
  RevPAR was up 2.9%, with the US up 2.2%. Trading in the US was impacted 
  by a number of both positive and negative factors; we estimate that 
  underlying growth was approximately 2.5%. Elsewhere in the region, 
  Canada was up 7%, benefitting from a robust convention calendar, whilst 
  Latin America and the Caribbean were up 16%, aided by reduced industry 
  supply following hurricane activity in late 2017. In Mexico RevPAR 
  was flat, adversely impacted by the strengthening of the Mexican peso 
  against the US dollar. 
 Europe, Middle East, Asia & Africa 
  RevPAR was up 2.9% in Q1. Continental Europe RevPAR was up 6% with 
  continued recovery in terror impacted markets (France and Belgium both 
  up high single digits, Turkey up double digits) offset partly by an 
  adverse trade fair calendar in Germany (down 2%). In the UK, RevPAR 
  was down 1% (London down 3%, provinces up 1%) due to strong prior year 
  comparables and the shift in the timing of Easter. Elsewhere, Middle 
  East RevPAR was down 6% due to high supply growth, Australia was up 
  4% with strong corporate demand in key cities, whilst Japan, up 3%, 
  benefitted from strong transient demand related to the Chinese New 
  Year. 
  In February, IHG received liquidated damages totalling $15m relating 
  to the termination of a portfolio of 13 open hotels (2k rooms) and 
  6 pipeline hotels (1k rooms) in Germany, which will remain in IHG's 
  system until 2020. Under IFRS 15, the $15m will be recognised over 
  the period until they exit (H1 2018: $2.8m, FY 2018: $6.7m, FY 2019: 
  $7.7m, H1 2020: $1.0m). 
--------------------------------------------------------------------------------- 
 Greater China 
  RevPAR was up 11.0% in Q1, with 10% growth in mainland China, which 
  benefitted from an extended build up to Chinese New Year in February. 
  Double digit RevPAR growth in tier 1 and tier 2 cities was driven by 
  strong transient, corporate and meetings demand. Tier 3 and tier 4 
  cities continued to see mid-single digit growth, aided by the ongoing 
  ramp-up of our hotels. In Hong Kong, RevPAR was up 15%, with mainland 
  China inbound demand boosted by the strengthening of the Chinese renminbi 
  against the Hong Kong dollar. Macau RevPAR was up 25%, reflecting the 
  ongoing improvement in market conditions. 
  The acceleration in Q1 RevPAR and rooms growth in Greater China to 
  11% and 9% respectively reflects the ongoing benefit of our strong 
  strategic focus on this important market. 
 Strategic progress 
--------------------------------------------------------------------------------- 
     Good progress has been made against our new strategic priorities to 
      drive industry leading net rooms growth over the medium term. 
      Build and leverage scale 
       *    Net system size up 4.3% year on year to 800k rooms 
            (5,367 hotels). 
 
 
       *    8k rooms (53 hotels) opened in the quarter, up 16% on 
            the prior year and including our highest ever Q1 
            openings in Greater China. 6k rooms (34 hotels) were 
            removed from the system. 
 
 
       *    20k rooms (146 hotels) signed, our highest Q1 rooms 
            signings since 2007. Includes our strongest Q1 in the 
            Americas since 2008, and our best ever Q1 in Greater 
            China. 
 
 
       *    252k pipeline rooms; 45% under construction. 
 
 
      Enhance revenue delivery 
       *    Roll out of GRS and IHG Concerto continues at pace, 
            with over 1,000 hotels now migrated to the platform. 
            On track to complete the roll-out by the end of 2018 
            / early 2019. 
 
 
      Evolve owner proposition 
       *    Continued momentum with Holiday Inn Express Franchise 
            Plus in Greater China, with 11 properties (2k rooms) 
            signed in Q1. There are now 8 open and 77 pipeline 
            Holiday Inn Express Franchise Plus properties in the 
            region. 
 
 
      Optimise our preferred portfolio of brands for owners and guests 
       *    Luxury - expanding our portfolio: 
 
 
       *    Acquisition of Regent Hotels & Resorts; expected to 
            close in mid 2018; 6 open hotels (2.0k rooms) and 3 
            pipeline hotels (0.9k rooms); expected to grow to 
            more than 10,000 rooms (40 hotels) over the long 
            term. 
 
 
       *    Agreement to rebrand a UK portfolio of hotels; 
            establishing IHG as the leading UK luxury operator; 
            launching Kimpton Hotels & Restaurants; expanding 
            InterContinental's presence. 
 
 
       *    Upscale - growing our offer: 
 
 
       *    UK portfolio deal will also strengthen IHG's upscale 
            presence and will establish a position for its new 
            upscale brand, principally focused on conversion 
            opportunities. 
 
 
       *    Mainstream - continued strong signings pace for our 
            newest brand: 
 
 
       *    More than 100 avid hotels now signed, including 51 
            hotels (4.8k rooms) signed in Q1 2018, two of which 
            were in Canada. This equates to one new deal signed 
            every other day since launch in September 2017. 
 
 
      Efficiency programme 
       *    Confident in our ability to deliver $125m of annual 
            savings by 2020 for reinvestment to drive growth, 
            with our efficiency programme well underway. 
 
 
       *    Continue to expect $200m exceptional cash costs to 
            achieve the savings; $31m in 2017 with majority of 
            the remainder in 2018. 
 
 
 Financial position and capital allocation 
------------------------------------------------------------------------- 
 The financial position of the group remains robust, with an on-going 
  commitment to an efficient balance sheet and an investment grade credit 
  rating. 
 
 Foreign exchange 
--------------------------------------------------------------------------- 
 The weakening of the US dollar against many major currencies globally 
  increased group RevPAR to 6.5% in the quarter, when reported at actual 
  exchange rates. A breakdown of constant vs. actual currency RevPAR by 
  region is set out in Appendix 2. 
--------------------------------------------------------------------------- 
 IFRS 15 
--------------------------------------------------------------------------- 
 On 17th April IHG issued new financial statements for 2016 and 2017 
  reflecting several reporting changes highlighted at our 2017 full year 
  results. These include the adoption of IFRS 15 Revenue from Contracts 
  with Customers, the Group's new regional structure, and the reporting 
  of Fee Business results. Further detail of these changes can be found 
  at https://www.ihgplc.com/investors/results-and-presentations. 
 
 
 Appendix 1: First quarter RevPAR movement summary 
                       Q1 2018 
                RevPAR   Rate    Occ. 
               -------  -----  -------- 
    Group        3.5%    1.9%   1.0%pts 
    Americas     2.9%    2.0%   0.6%pts 
    EMEAA        2.9%    1.7%   0.8%pts 
    G. China    11.0%    3.9%   3.9%pts 
   ----------  -------  -----  -------- 
 
   Appendix 2: RevPAR at constant exchange rates (CER) vs. actual exchange rates 
   (AER)                      Q1 2018 
                 CER     AER    Difference 
               ------  ------  ----------- 
    Group       3.5%    6.5%    (3.0)%pts 
    Americas    2.9%    3.2%    (0.3)%pts 
    EMEAA       2.9%    11.3%   (8.4)%pts 
    G. China    11.0%   18.3%   (7.3)%pts 
   ----------  ------  ------  ----------- 
 
   Appendix 3: Q1 system & pipeline summary (rooms) 
   ------------------------------------------------------------------------------ 
                                   System                           Pipeline 
                Openings   Removals     Net     Total   YoY%   Signings     Total 
               ---------  ---------  ------  --------  -----  ---------  -------- 
    Group          7,920    (6,072)   1,848   799,923   4.3%     19,727   252,451 
    Americas       3,249    (3,519)   (270)   497,190   2.3%      9,928   113,739 
    EMEAA          1,639    (1,825)   (186)   198,890   6.9%      2,103    63,651 
    G. China       3,032      (728)   2,304   103,843   9.4%      7,696    75,061 
   ----------  ---------  ---------  ------  --------  -----  ---------  -------- 
 
    Appendix 4: Definitions 
   ------------------------------------------------------------------------------ 
    AER: Actual exchange rates used for each respective period. 
     CER: Constant exchange rates. 
     RevPAR: Revenue per available room. 
   ------------------------------------------------------------------------------ 
 
    For further information, please contact: 
   ---------------------------------------------------------------------------------- 
    Investor Relations (Catherine Dolton; Tom            +44 (0)1895   +44 (0)7527 
     Yates; Matthew Kay):                                 512176        419431 
    Media Relations (Yasmin Diamond; Zoe Bird;           +44 (0)1895   +44 (0)7527 
     Mark Debenham):                                      512097        424046 
   ---------------------------------------------------  ------------  --------------- 
 
     Conference call for Analysts and Shareholders: 
     A conference call with Paul Edgecliffe-Johnson (Chief Financial Officer) 
     will commence at 9.00am London time on 4 May and can be accessed on 
     https://www.ihgplc.com/investors/2018-first-quarter-trading-update. 
     There will be an opportunity to ask questions. 
   ---------------------------------------------------------------------------------- 
    International dial-in                      +44 203 936 2999 
     UK dial-in                                 +44 (0) 203 936 2999 
     US dial-in                                 +1 845 213 3398 
     Passcode                                   09 64 60 
 
     A replay of the 9.00am conference call will be available for 7 days 
     from 11:30am London time - details are below: 
   ---------------------------------------------------------------------------------- 
    International dial-in                      +44 203 936 3001 
     UK dial-in                                 +44 (0) 203 936 3001 
     US dial-in                                 +1 845 709 8569 
     Replay pin                                 70 95 40 
   -----------------------------------------  --------------------------------------- 
 
 
  US conference call and Q&A: 
   There will also be a conference call, primarily for US investors and 
   analysts, at 9.00am New York (2pm London) Time on 4 May with Paul 
   Edgecliffe-Johnson (Chief Financial Officer). There will be an opportunity 
   to ask questions. 
 
 International dial-in                                     +44 203 936 2999 
  US dial-in                                                + 1 845 213 3398 
  UK dial-in                                                +44 (0) 203 936 2999 
  Passcode                                                  29 22 26 
--------------------------------------------------------  --------------------------------------------------------- 
 A replay of the 2.00pm conference call will be available for 7 days 
  from 5pm London time - details are below: 
------------------------------------------------------------------------------------------------------------------- 
 International dial-in                                     +44 203 936 3001 
  US dial-in                                                + 1 845 709 8569 
  UK dial-in                                                +44 (0) 203 936 3001 
  Passcode                                                  20 16 82 
--------------------------------------------------------  --------------------------------------------------------- 
 
   Website: 
   The full release and supplementary data will be available on our website 
   from 7.00am (London time) on 4 May. The web address is www.ihgplc.com/investors/results-and-presentations. 
 Notes to Editors: 
  IHG(R) (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is 
  a global organisation with a broad portfolio of hotel brands, including 
  InterContinental(R) Hotels & Resorts, Kimpton(R) Hotels & Restaurants, 
  Hotel Indigo(R) , EVEN(R) Hotels, HUALUXE(R) Hotels and Resorts, Crowne 
  Plaza(R) Hotels & Resorts, Holiday Inn(R) , Holiday Inn Express(R) 
  , Holiday Inn Club Vacations(R) , Holiday Inn Resort(R) , avid(TM) 
  hotels, Staybridge Suites(R) and Candlewood Suites(R) . 
 
  IHG franchises, leases, manages or owns nearly 5,400 hotels and 800,000 
  guest rooms in almost 100 countries, with more than 1,700 hotels in 
  its development pipeline. IHG also manages IHG(R) Rewards Club, our 
  global loyalty programme, which has more than 100 million enrolled 
  members. 
 
  InterContinental Hotels Group PLC is the Group's holding company and 
  is incorporated in Great Britain and registered in England and Wales. 
  More than 375,000 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.ihgplc.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. 
 
 

[1] RevPAR growth is at constant exchange rates (CER) unless otherwise stated.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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