|
99.1
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Half Yearly Report |
|
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Financial summary1
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Reported
|
Underlying at 2014 constant rates2
|
||||
|
2015
|
2014
|
% Change
|
2015
|
2014
|
% Change
|
|
|
Revenue
|
$915m
|
$908m
|
1%
|
$801m
|
$740m
|
8%
|
|
Fee Revenue3
|
$626m
|
$600m
|
4%
|
$652m
|
$600m
|
9%
|
|
Operating profit
|
$337m
|
$310m
|
9%
|
$329m5
|
$299m
|
10%
|
|
Adjusted EPS
|
87.2¢
|
70.7¢
|
23%
|
85.2¢
|
68.0¢
|
25%
|
|
Basic EPS4
|
156.2¢
|
93.0¢
|
68%
|
-
|
-
|
-
|
|
Total dividend per share
|
27.5¢
|
25.0¢
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10%
|
-
|
-
|
-
|
|
Net debt
|
$1,710m
|
$1,533m
|
12%
|
-
|
-
|
-
|
|
Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, said:
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"We continued to make strong progress against our winning strategy in the first half, strengthening our brands, loyalty programme and owner proposition. We delivered our best first half for signings since 2008, underlying fee revenue growth of 9%, and underlying profit2 growth of 10%, giving us the confidence to increase the interim dividend by 10%.
Our preferred brands demonstrated their continued momentum as we signed the highest number of Holiday Inn rooms ever in the first half, including the two largest properties for the brand, and strengthened our leadership position in the fast growing boutique segment. Alongside this we continue to make great progress delivering against our technology objectives, introducing a number of new digital initiatives that have helped drive almost 50% growth in mobile revenue.
The completion of the sale of InterContinental Paris - Le Grand for €330m, and agreement to sell InterContinental Hong Kong for $938m, marks the successful finalisation of our major owned asset disposal programme, which has realised gross proceeds of $8bn.
Looking forward, based on current trading trends, we remain confident in the outlook for the rest of the year."
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Financial Highlights
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· Strong fee revenue growth in all regions
- Global comparable H1 RevPAR up 5.1%, with growth across all regions. Q2 comparable RevPAR growth of 4.4%.
- $11.2bn total gross revenue from hotels in IHG's system (up 1% year-on-year; 7% CER).
- Underlying fee revenue up 9%, leveraging both RevPAR and room growth. Reported fee revenue up 4%, negatively impacted by foreign exchange translation.
· Focus on disciplined execution
- Finalised major owned asset disposal programme with agreed sale of InterContinental Hong Kong for $938m.
- Underlying operating profit2 growth up 10% (reported up 9%) driven by our focus on efficient execution.
- Group fee-based margin up 1.8%pts year on year to 46.8%, benefiting from scale growth.
- 10% increase in interim dividend to 27.5¢ demonstrating strong momentum behind the business.
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Strategic Progress
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· Enhancing our portfolio of preferred brands
- Holiday Inn brand family continues to deliver global growth with highest ever number of first half room signings, eight years on from commencing the industry's most successful brand relaunch.
- Extended stay brands accelerating scale with highest number of openings and signings since 2010, and over 100 Staybridge Suites hotels in the pipeline.
- Our boutique hotel brands continue to grow strongly. We have opened five new Kimpton hotels since its acquisition in what is expected to be the best year for additions in the brand's history, and we opened Hotel Indigo in two new geographic markets.
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· Building and leveraging scale
- Added 28k rooms (including Kimpton acquisition), increasing total system size to 724k rooms, representing year-on-year net system size growth of 4.5%.
- 41k first half room signings, our most since 2008, delivered a closing pipeline of 214k rooms, with almost 100k rooms under construction, our highest ever.
- 86% of open rooms and 90% of pipeline in our 10 priority markets.
- 5% share of global industry supply, 13% share of active industry pipeline; well positioned to drive future growth.
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· Driving digital capability and enhancing loyalty
- Pioneering partnership with Amadeus to develop the industry's first cloud-based Guest Reservation System.
- Digital channel delivery tracking at over $4bn per annum, driving revenue at a low cost of sale to our owners.
- Introduced more guest solutions for our #1 rated mobile app, driving over 50% growth in mobile app downloads and 48% growth in mobile revenue to over $1bn on an annualised basis.
- Enhanced our loyalty offer through IHG Rewards Club, launching a new top tier, Spire Elite, and rolling out new in-hotel customer relationship management capability across the global estate.
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Americas - Rate driven RevPAR growth and highest signings in seven years
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Comparable H1 RevPAR increased 5.4%, driven by rate growth of 4.2%; second quarter RevPAR increased 4.7%.
In the US, RevPAR was up 5.6% in the first half and 4.8% in Q2, with a continued increase in demand and limited supply growth delivering record levels of occupancy across the estate. The Holiday Inn brand family continued to deliver more than a 6%pt RevPAR premium to its industry segment with H1 RevPAR up 5.7%. However, performance was impacted by the weighting of our distribution towards oil producing states where trading has been challenging.
Elsewhere, Mexico RevPAR was up 9.4% driven by double digit growth in key cities, whilst RevPAR growth in Canada increased by 1.0%, also impacted by performance in oil producing areas.
Underlying1 revenue and profit were up 10% and 8%, respectively, driven by our franchise business which increased underlying1 profit by 10%. This was partially offset by a number of one-offs in the half: a higher charge associated with our US healthcare schemes, up $3m due to adverse claims; a $3m impact from difficult trading in Latin America, driven by further economic issues in Venezuela; and the continued refurbishment of InterContinental New York Barclay, which is due to open in the second quarter of 2016 and will take a period of time to ramp up trading performance.
Reported revenue increased 8% to $471m and operating profit increased 10% to $295m following the consolidation of Kimpton, partially offset by the sale of owned assets and a $4m reduction in significant liquidated damages (2015: $3m, 2014: $7m).
We opened 10k rooms (96 hotels) in the first half across the Americas, of which nearly half were Holiday Inn Express, and removed 55 properties, in line with 2014, as we continue to focus on the quality of our estate. We signed 21k rooms (166 hotels), an increase for the fifth year running and more than double the level in 2010. Highlights include the 596 room Holiday Inn Express Honolulu Waikiki Beach, the largest property for the brand in the Americas, and Hotel Indigo Los Angeles, where we are working in partnership with one of our largest owners in China, Greenland Group.
Kimpton
We completed the acquisition of Kimpton in the first quarter, and since then the integration has progressed well, with first half revenue of $33m and operating profit of $14m, including $3m of significant liquidated damages.
We believe Kimpton has great growth potential both in the US and internationally, with 2015 expected to be the best year for openings and signings in the brand's history. We have secured five new signings already, and are in discussions to sign the first hotels for the brand outside the US, where demand from existing IHG owners is exceptionally strong. During July, seven Kimpton hotels in San Francisco, representing annual fee revenue of $6m, were removed from the system due to a specific issue.
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Europe - Continued trading and signings momentum
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Comparable H1 RevPAR increased 5.1% led by rate growth; second quarter RevPAR was up 4.4%. UK trading continues to be positive with growth of 6.1% driven by a strong performance in the provinces, up 8.0%, and to a lesser extent London, which was impacted by supply growth and a less favourable events calendar in the period. Germany, our second largest market, was up 5.0% as our Holiday Inn brand family continues to outperform the industry. Most key cities across the rest of southern and central Europe exhibited solid increases, but there was limited growth in France, and trading remains challenging in Russia.
On an underlying basis1, revenue was up 10% and operating profit up 22%, driven by good growth in the franchise business, up 19% at CER, following the transition of approximately 60 UK managed hotels to franchise contracts, and strong RevPAR growth across major markets.
Significant foreign exchange translation movements in the UK and the Eurozone, and challenging trading at InterContinental Paris - Le Grand, impacted reported revenue, which decreased by 21% (5% CER) to $144m and operating profit, which decreased 5% (13% growth at CER) to $36m.
Openings of 2k rooms (13 hotels) included the Holiday Inn Frankfurt, one of 17 properties utilising our innovative Open Lobby concept, and Hotel Indigo Helsinki, another new country entry for the brand which now has a presence across eight European markets. We signed 3k rooms (15 hotels) into our pipeline, including six deals in Germany with our network of multi-development agreement partners, and the InterContinental Lyon - Hotel Dieu which will mark the fifth hotel for the InterContinental brand in France.
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AMEA - Solid growth led by performance in Japan and South East Asia
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First half comparable RevPAR was up 5.4% and second quarter RevPAR increased 4.5%, both driven by growth in rate and occupancy. Performance was led by Japan which grew 12.8%, benefiting from increased inbound travel from China. Performance across the Middle East was mixed with 9.9% growth in Saudi Arabia somewhat offset by soft trading in the UAE. South East Asia was up 7.8% due to double digit growth in Thailand and Vietnam, the former continuing to recover strongly following challenging trading conditions in 2014. India exhibited robust growth with double digit increases in Q2 as the economic sentiment improves.
On an underlying basis1, revenue was up 4% and operating profit up 17%, with growth in like-for-like performance across the majority of the fee business and a continued focus on efficiency. Reported operating profit increased 5% to $40m, negatively impacted by foreign exchange translation, particularly in Japan and Australia.
We opened 2k rooms (11 hotels) including the Holiday Inn Express Seoul, one of two new country entries for the brand, and two conversion properties in India, one of our focus markets. Signings of 9k rooms (19 hotels) were double that of the same period last year, and include the 5,154 room Holiday Inn Makkah, the largest for the brand in the world.
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Greater China - Market outperformance delivers RevPAR growth
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Comparable H1 RevPAR increased 1.5%, led by an improvement in occupancy, with second quarter RevPAR up 0.6%. Total RevPAR declined by 2.4% as newly opened hotels ramp up and we continue to grow our distribution in tier 2 and tier 3 cities. Our operational expertise and the preference for our brands enabled us to deliver industry outperformance of approximately 5%pts, driving comparable RevPAR growth in mainland China of 4.8%. This was led by strong performance in primary cities, in particular Shanghai up 13.7%. Secondary and tertiary cities experienced robust demand growth, but this was largely offset by increased supply. Trading remains challenging in Hong Kong and Macau, with the former affected by an industry-wide decline in inbound tourism, and the latter continuing to be impacted by the austerity measures of the Chinese government.
On both a reported and underlying basis, revenue increased 5% (5% CER) to $118m with our fee business up 11%, driven by growth in room count of 10% year-on-year and RevPAR outperformance. Operating profit declined 6% (6% CER) to $34m, impacted by our investment to enhance regional operational capabilities, and the performance at InterContinental Hong Kong, where profit declined 5% due to the challenging trading environment across the market. We anticipate the sale of this asset will complete during the second half of 2015, following which IHG will earn management fees of approximately $8m per annum.
We opened 2k rooms (8 hotels), including our first two HUALUXE Hotels and Resorts in Yangjiang and Nanchang, as we continue to leverage our market leading scale to add four more hotels than our nearest international competitor. Our pipeline passed 200 hotels for the first time, as room signings grew over 20% year-on-year to 9k rooms (31 hotels), securing the 1,300 room Holiday Inn Kunming in the second quarter.
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Capital allocation - commitment to efficient balance sheet and investing for growth
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· Successful completion of strategic review of owned assets
- Completed the sale of InterContinental Paris - Le Grand for €330m in the second quarter.
- Agreed to sell InterContinental Hong Kong for $938m, with proceeds expected to be received in the second half.
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· Investing for growth
- $125m gross capital expenditure in the first half comprised: $46m maintenance capex and key money; $49m recyclable investments; and $30m system funded capital investments. $6m proceeds received from other assets and $10m system fund depreciation received via working capital, resulting in $109m of net capital expenditure.
- Gross capex guidance remains unchanged at up to $350m per annum into the medium term. In 2015 this includes system fund capital investments of up to $100m as we evolve our bespoke technology solutions.
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· Continued ordinary dividend growth
- Interim dividend increase proposed of 10% to 27.5¢, reflecting confidence in our outlook and the cash generative nature of our fee business model.
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· Efficient balance sheet and shareholder returns
- Following the announcement of the introduction of points expiry for IHG Rewards Club, there is a release of $156m from the programme's future redemption liability. This has resulted in a corresponding increase in the System Fund surplus.
- Half year net debt of $1,710m (including $220m finance lease on InterContinental Boston) is up $177m since the end of 2014, driven by the $430m acquisition of Kimpton. Half year borrowing position represents a net debt / EBITDA ratio of 2.2x.
- As previously announced, a decision on return of funds to shareholders from asset sales completed in 2015 will be disclosed at preliminary results in February 2016.
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Foreign exchange - Strength of USD continues to impact reported profit
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The US dollar continued to strengthen throughout the first half, reducing group RevPAR growth to 0.5% when reported at actual rates, and impacting reported profit by $8m. Europe and AMEA are the two regions most affected, with foreign exchange reducing RevPAR growth by 15%pts and 7%pts respectively.
Based on current exchange rate movements, for every 1%pt difference in full year group RevPAR growth between constant and actual exchange rates, we expect a $4m impact on reported fee business operating profit.
A full breakdown of constant currency vs. actual currency RevPAR by region is set out in appendix 2.
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Interest, tax, and exceptional items
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Interest: Net financial expenses increased by $4m to $43m reflecting an increase in average net debt levels following the acquisition of Kimpton. Financing costs include $10m in respect of the finance lease on InterContinental Boston.
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Tax: Based on the position at the end of the half, the tax charge has been calculated using an interim effective tax rate of 30% (H1 2014: 33%). The full year tax rate is expected to be in the low to mid 30s as previously guided.
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Exceptional operating items: Net exceptional gain of $164m for the half comprised: $175m net gain on asset disposals, $4m Kimpton integration costs, $4m charge relating to changes to the Venezuelan currency exchange rate; and $3m charge relating to restructuring of the Group's corporate functions.
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Appendix 1: RevPAR movement summary
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Half year 2015
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Q2 2015
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|||||
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RevPAR
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Rate
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Occ.
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RevPAR
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Rate
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Occ.
|
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Group
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5.1%
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3.3%
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1.2pts
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4.4%
|
3.1%
|
0.9pts
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Americas
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5.4%
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4.2%
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0.8pts
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4.7%
|
4.1%
|
0.4pts
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Europe
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5.1%
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3.3%
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1.2pts
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4.4%
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2.8%
|
1.1pts
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AMEA
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5.4%
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2.0%
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2.3pts
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4.5%
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1.9%
|
1.8pts
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G. China
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1.5%
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(3.0)%
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2.7pts
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0.6%
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(3.3%)
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2.5pts
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Appendix 2: RevPAR movement summary at constant exchange rates (CER) vs. actual exchange rates (AER)
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Half year 2015
|
Q2 2015
|
|||||
|
CER
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AER
|
Difference
|
CER
|
AER
|
Difference
|
|
|
Group
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5.1%
|
0.5%
|
(4.6)pts
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4.4%
|
(0.4)%
|
(4.8)pts
|
|
Americas
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5.4%
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3.9%
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(1.5)pts
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4.7%
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3.2%
|
(1.5)pts
|
|
Europe
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5.1%
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(10.3)%
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(15.4)pts
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4.4%
|
(11.2)%
|
(15.6)pts
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AMEA
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5.4%
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(1.6)%
|
(7.0)pts
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4.5%
|
(3.6)%
|
(8.1)pts
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G. China
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1.5%
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0.9%
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(0.6)pts
|
0.6%
|
0.9%
|
0.3pts
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Appendix 3: First half system & pipeline summary (rooms)
|
|||||||
|
System
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Pipeline
|
||||||
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Openings
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Removals
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Net
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Total
|
YoY%
|
Signings
|
Total
|
|
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Group
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27,532
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(13,809)
|
13,723
|
724,018
|
4.5%
|
43,204
|
214,134
|
|
Kimpton acquisition
|
11,325
|
-
|
11,325
|
11,325
|
-
|
2,603
|
2,603
|
|
Underlying Group
|
16,207
|
(13,809)
|
2,398
|
712,693
|
2.8%
|
40,601
|
211,531
|
|
Americas
|
10,329
|
(7,381)
|
2,948
|
462,965
|
2.0%
|
20,519
|
92,375
|
|
Europe
|
1,871
|
(2,405)
|
(534)
|
103,674
|
1.2%
|
2,528
|
19,484
|
|
AMEA
|
2,059
|
(1,811)
|
248
|
68,124
|
3.1%
|
8,893
|
41,066
|
|
G. China
|
1,948
|
(2,212)
|
(264)
|
77,930
|
9.5%
|
8,661
|
58,606
|
|
Appendix 4: First half financial headlines
|
||||||||||||
|
6 months to 30 June
Operating Profit $m
|
Total
|
Americas
|
Europe
|
AMEA
|
G. China
|
Central
|
||||||
|
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
2015
|
2014
|
|
|
Franchised
|
324
|
307
|
279
|
263
|
37
|
36
|
6
|
6
|
2
|
2
|
-
|
-
|
|
Managed
|
116
|
107
|
36
|
25
|
13
|
15
|
42
|
42
|
25
|
25
|
-
|
-
|
|
Owned & leased
|
32
|
30
|
12
|
8
|
1
|
2
|
1
|
1
|
18
|
19
|
-
|
-
|
|
Regional overheads
|
(67)
|
(64)
|
(32)
|
(28)
|
(15)
|
(15)
|
(9)
|
(11)
|
(11)
|
(10)
|
-
|
-
|
|
Profit pre central overheads
|
405
|
380
|
295
|
268
|
36
|
38
|
40
|
38
|
34
|
36
|
-
|
-
|
|
Central overheads
|
(68)
|
(70)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(68)
|
(70)
|
|
Group Operating profit
|
337
|
310
|
295
|
268
|
36
|
38
|
40
|
38
|
34
|
36
|
(68)
|
(70)
|
|
Total***
|
Americas
|
Europe
|
AMEA
|
G. China
|
|||||||||||||
|
Reported
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
|||||||
|
Growth/ (decline)
|
9%
|
11%
|
10%
|
11%
|
(5)%
|
13%
|
5%
|
13%
|
(6)%
|
(6)%
|
|||||||
|
Underlying****
Growth/ (decline)
|
Total***
|
Americas
|
Europe
|
AMEA
|
G. China
|
||||||||||||
|
10%
|
8%
|
22%
|
17%
|
(6)%
|
|||||||||||||
|
H1 Exchange rates:
|
GBP:USD
|
EUR:USD
|
* US dollar actual currency
|
||||||||||||||
|
2015
|
0.66
|
0.90
|
** Translated at constant 2014 exchange rates
|
||||||||||||||
|
2014
|
0.60
|
0.73
|
*** After central overheads
|
||||||||||||||
|
**** At CER and excluding: Kimpton, owned asset disposals, results from managed lease hotels and significant liquidated damages (see below for definitions)
|
|||||||||||||||||
|
Appendix 6: Definitions
|
|
CER: constant exchange rates with H1 2014 exchange rates applied to H1 2015.
Comparable RevPAR: Revenue per available room for hotels that have traded for all of 2014 and 2015 year to date, reported at CER.
Fee revenue: Group revenue excluding owned & leased hotels, managed leases and significant liquidated damages.
Fee margin: adjusted for owned and leased hotels, managed leases and significant liquidated damages.
Managed lease hotels: properties structured for legal reasons as operating leases but with the same characteristics as management contracts
Americas: Revenue H1 2015 $22m; H1 2014 $21m; EBIT H1 2015 $2m, H1 2014 $1m. Europe: Revenue H1 2015 $36m; H1 2014 $46m; EBIT H1 2015 $(1m), H1 2014 $nil. AMEA: Revenue H1 2015 $21m; H1 2014 $19m; EBIT H1 2015 $1m, H1 2014 $2m.
Owned asset disposals: InterContinental Paris - Le Grand was sold on 20 May 2015 (H1 2015: $30m revenue and $1m EBIT, H1 2014: $52m revenue and $2m EBIT); InterContinental Mark Hopkins San Francisco was sold on 27 March 2014 (H1 2015: $nil revenue and $nil EBIT, H1 2014: $9m revenue and $nil EBIT) and 80% of IHG's interest in the InterContinental New York Barclay was disposed of on 31 March 2014 retaining the remaining 20% in a joint venture (H1 2015: $nil revenue and $nil EBIT, H1 2014: $14m revenue and $(1)m EBIT).
Significant liquidated damages: $3m in H1 2015 ($3m Americas managed in Q2), and $7m in H1 2014 ($4m Americas franchised in Q1, $3m Americas franchised in Q2).
Total gross revenue: total rooms 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.
Total RevPAR: Revenue per available room including hotels that have opened or exited in either FY 2014 or H1 2015, reported at CER.
|
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Appendix 7: Investor Information for proposed 2015 interim dividend
|
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|
Ex-dividend date:
|
27 August 2015
|
Record date:
|
28 August 2015
|
|
Payment date:
|
2 October 2015
|
Dividend payment:
|
Ordinary shares: 17.7 pence per share; ADRs: 27.5 cents per ADR
|
|
For further information, please contact:
|
||
|
Investor Relations (David Kellett; Emma Parker; Matt Woollard):
|
+44 (0)1895 512 176
|
+44 (0)7808 098 724
|
|
Media Relations (Yasmin Diamond; Zoë Bird):
|
+44 (0)1895 512 008
|
+44 (0)7736 746 167
|
|
Webcast for Analysts and Shareholders:
A conference call and webcast presented by Richard Solomons, Chief Executive Officer and Paul Edgecliffe-Johnson, Chief Financial Officer will commence at 9:15am London time on Thursday 30 July on the web address www.ihgplc.com/interims15. For those wishing to ask questions please use the dial in details below which will have a Q&A facility. The webcast replay will be available on the website later on the day of the results and will remain there for the foreseeable future.
|
||
|
UK toll:
UK toll free:
US toll:
Passcode:
|
+44 (0)20 3003 2666
0808 109 0700
+1 646 843 4608
IHG Investor
|
|
|
A replay of the conference call will also be available following the event - details are below.
|
||
|
Replay:
Pin:
|
+44 (0)20 8196 1998
6471903#
|
|
|
US conference call and Q&A:
There will also be a conference call, primarily for US investors and analysts, at 9:00am New York Time on 30 July with Richard Solomons, Chief Executive Officer and Paul Edgecliffe-Johnson, Chief Financial Officer. There will be an opportunity to ask questions.
|
||
|
UK toll:
US toll:
US toll free:
Passcode:
|
+44 (0)20 3003 2666
+1 646 843 4608
+1 866 966 5335
IHG Investor
|
|
|
A replay of the conference call will also be available following the event - details are below.
|
||
|
Replay:
Pin:
|
+44 (0)20 8196 1998
6405189#
|
|
|
Website:
The full release and supplementary data will be available on our website from 7:00am (London time) on 30th July The web address is www.ihgplc.com/interims15.
|
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|
Notes to Editors:
IHG® (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of hotel brands, including InterContinental® Hotels & Resorts, Kimpton Hotels & Restaurants, HUALUXE® Hotels and Resorts, Crowne Plaza® Hotels & Resorts, Hotel Indigo®, EVEN™ Hotels, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Staybridge Suites® and Candlewood Suites®.
IHG franchises, leases, manages or owns more than 4,900 hotels and 724,000 guest rooms in nearly 100 countries, with almost 1,300 hotels in its development pipeline. IHG also manages IHG® Rewards Club, the world's first and largest hotel loyalty programme with more than 88 million members worldwide.
InterContinental Hotels Group PLC is the Group's holding company and is incorporated in Great Britain and registered in England and Wales. More than 350,000 people work across IHG's hotels and corporate offices globally.
Visit www.ihg.com for hotel information and reservations and www.ihgrewardsclub.com for more on IHG Rewards Club. For our latest news, visit: www.ihg.com/media and follow us on social media at: www.twitter.com/ihg, www.facebook.com/ihg and www.youtube.com/ihgplc.
|
||
|
Cautionary note regarding forward-looking statements:
This announcement contains certain forward-looking statements as defined under United States law (Section 21E of the Securities Exchange Act of 1934) and otherwise. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as 'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe' or other words of similar meaning. These statements are based on assumptions and assessments made by InterContinental Hotels Group PLC's management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty. There are a number of factors that could cause actual results and developments to differ materially from those expressed in or implied by, such forward-looking statements. The main factors that could affect the business and the financial results are described in the 'Risk Factors' section in the current InterContinental Hotels Group PLC's Annual report and Form 20-F filed with the United States Securities and Exchange Commission.
|
||
|
6 months ended 30 June
|
||||
|
Group results
|
2015
|
2014
|
%
|
|
|
$m
|
$m
|
change
|
||
|
Revenue
|
||||
|
Americas
|
471
|
435
|
8.3
|
|
|
Europe
|
144
|
182
|
(20.9)
|
|
|
AMEA
|
116
|
117
|
(0.9)
|
|
|
Greater China
|
118
|
112
|
5.4
|
|
|
Central
|
66
|
62
|
6.5
|
|
|
____
|
____
|
____
|
||
|
Total
|
915
|
908
|
0.8
|
|
|
____
|
____
|
____
|
||
|
Operating profit
|
||||
|
Americas
|
295
|
268
|
10.1
|
|
|
Europe
|
36
|
38
|
(5.3)
|
|
|
AMEA
|
40
|
38
|
5.3
|
|
|
Greater China
|
34
|
36
|
(5.6)
|
|
|
Central
|
(68)
|
(70)
|
2.9
|
|
|
____
|
____
|
____
|
||
|
Operating profit before exceptional items
|
337
|
310
|
8.7
|
|
|
Exceptional operating items
|
164
|
106
|
54.7
|
|
|
____
|
____
|
____
|
||
|
501
|
416
|
20.4
|
||
|
Net financial expenses
|
(43)
|
(39)
|
(10.3)
|
|
|
____
|
____
|
____
|
||
|
Profit before tax
|
458
|
377
|
21.5
|
|
|
____
|
____
|
____
|
||
|
Earnings per ordinary share
|
||||
|
Basic
|
156.2¢
|
93.0¢
|
68.0
|
|
|
Adjusted
|
87.2¢
|
70.7¢
|
23.3
|
|
|
Average US dollar to sterling exchange rate
|
$1 : £0.66
|
$1 : £0.60
|
10.0
|
|
|
6 months ended 30 June
|
|||||
|
Americas Results
|
2015
|
2014
|
%
|
||
|
$m
|
$m
|
Change
|
|||
|
Revenue
|
|||||
|
Franchised
|
323
|
305
|
5.9
|
||
|
Managed
|
85
|
52
|
63.5
|
||
|
Owned and leased
|
63
|
78
|
(19.2)
|
||
|
____
|
____
|
____
|
|||
|
Total
|
471
|
435
|
8.3
|
||
|
____
|
____
|
____
|
|||
|
Operating profit before exceptional items
|
|||||
|
Franchised
|
279
|
263
|
6.1
|
||
|
Managed
|
36
|
25
|
44.0
|
||
|
Owned and leased
|
12
|
8
|
50.0
|
||
|
____
|
____
|
____
|
|||
|
327
|
296
|
10.5
|
|||
|
Regional overheads
|
(32)
|
(28)
|
(14.3)
|
||
|
____
|
____
|
____
|
|||
|
Total
|
295
|
268
|
10.1
|
||
|
____
|
____
|
____
|
|||
|
Hotels
|
Rooms
|
||||
|
Americas hotel and room count
|
Change over
|
Change over
|
|||
|
2015
30 June
|
2014
31 December
|
2015
30 June
|
2014
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
51
|
1
|
17,203
|
306
|
|
|
Kimpton
|
66
|
66
|
11,990
|
11,990
|
|
|
Crowne Plaza
|
180
|
(1)
|
48,164
|
(202)
|
|
|
Hotel Indigo
|
38
|
(1)
|
4,473
|
(78)
|
|
|
EVEN Hotels
|
2
|
-
|
296
|
-
|
|
|
Holiday Inn1
|
765
|
(5)
|
134,461
|
(1,819)
|
|
|
Holiday Inn Express
|
2,085
|
25
|
184,949
|
2,348
|
|
|
Staybridge Suites
|
207
|
10
|
22,234
|
1,034
|
|
|
Candlewood Suites
|
330
|
8
|
31,402
|
694
|
|
|
Other
|
78
|
-
|
19,118
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
3,802
|
103
|
474,290
|
14,273
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
3,511
|
34
|
418,528
|
1,313
|
|
|
Managed
|
286
|
69
|
54,132
|
12,960
|
|
|
Owned and leased
|
5
|
-
|
1,630
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
3,802
|
103
|
474,290
|
14,273
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
Hotels
|
Rooms
|
||||
|
Americas pipeline
|
Change over
|
Change over
|
|||
|
2015
30 June
|
2014
31 December
|
2015
30 June
|
2014
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
5
|
(2)
|
1,830
|
(507)
|
|
|
Kimpton
|
15
|
15
|
2,961
|
2,961
|
|
|
Crowne Plaza
|
15
|
(3)
|
2,609
|
(597)
|
|
|
Hotel Indigo
|
31
|
-
|
4,511
|
252
|
|
|
EVEN Hotels
|
4
|
1
|
714
|
130
|
|
|
Holiday Inn1
|
133
|
(6)
|
19,848
|
(307)
|
|
|
Holiday Inn Express
|
414
|
25
|
40,337
|
3,212
|
|
|
Staybridge Suites
|
98
|
8
|
10,480
|
886
|
|
|
Candlewood Suites
|
92
|
3
|
8,112
|
395
|
|
|
Other
|
16
|
6
|
3,576
|
2,358
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
823
|
47
|
94,978
|
8,783
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
765
|
25
|
82,107
|
3,127
|
|
|
Managed
|
57
|
22
|
12,669
|
5,658
|
|
|
Owned and Leased
|
1
|
-
|
202
|
(2)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
823
|
47
|
94,978
|
8,783
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
6 months ended 30 June
|
|||||
|
Europe results
|
2015
|
2014
|
%
|
||
|
$m
|
$m
|
change
|
|||
|
Revenue
|
|||||
|
Franchised
|
50
|
49
|
2.0
|
||
|
Managed
|
64
|
81
|
(21.0)
|
||
|
Owned and leased
|
30
|
52
|
(42.3)
|
||
|
____
|
____
|
____
|
|||
|
Total
|
144
|
182
|
(20.9)
|
||
|
____
|
____
|
____
|
|||
|
Operating profit before exceptional items
|
|||||
|
Franchised
|
37
|
36
|
2.8
|
||
|
Managed
|
13
|
15
|
(13.3)
|
||
|
Owned and leased
|
1
|
2
|
(50.0)
|
||
|
____
|
____
|
____
|
|||
|
51
|
53
|
(3.8)
|
|||
|
Regional overheads
|
(15)
|
(15)
|
-
|
||
|
____
|
____
|
____
|
|||
|
Total
|
36
|
38
|
(5.3)
|
||
|
____
|
____
|
____
|
|||
|
Hotels
|
Rooms
|
||||
|
Europe hotel and room count
|
Change over
|
Change over
|
|||
|
2015
30 June
|
2014
31 December
|
2015
30 June
|
2014
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
29
|
(1)
|
9,234
|
(138)
|
|
|
Crowne Plaza
|
83
|
-
|
19,296
|
(99)
|
|
|
Hotel Indigo
|
18
|
1
|
1,688
|
120
|
|
|
Holiday Inn1
|
280
|
(4)
|
45,353
|
(369)
|
|
|
Holiday Inn Express
|
224
|
(2)
|
26,997
|
(141)
|
|
|
Staybridge Suites
|
6
|
1
|
877
|
93
|
|
|
Other
|
2
|
-
|
229
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
642
|
(5)
|
103,674
|
(534)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
599
|
34
|
91,653
|
7,637
|
|
|
Managed
|
43
|
(38)
|
12,021
|
(7,701)
|
|
|
Owned and leased
|
-
|
(1)
|
-
|
(470)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
642
|
(5)
|
103,674
|
(534)
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
Hotels
|
Rooms
|
||||
|
Europe pipeline
|
Change over
|
Change over
|
|||
|
2015
30 June
|
2014
31 December
|
2015
30 June
|
2014
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
5
|
2
|
1,047
|
202
|
|
|
Crowne Plaza
|
12
|
(2)
|
2,583
|
(334)
|
|
|
Hotel Indigo
|
11
|
(1)
|
1,312
|
(56)
|
|
|
Holiday Inn1
|
39
|
2
|
7,470
|
526
|
|
|
Holiday Inn Express
|
45
|
1
|
6,720
|
346
|
|
|
Staybridge Suites
|
3
|
(1)
|
321
|
(93)
|
|
|
Other
|
-
|
-
|
31
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
115
|
1
|
19,484
|
591
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
95
|
-
|
14,445
|
449
|
|
|
Managed
|
20
|
1
|
5,039
|
142
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
115
|
1
|
19,484
|
591
|
|
|
____
|
____
|
______
|
_____
|
||
|
6 months ended 30 June
|
|||||
|
AMEA results
|
2015
|
2014
|
%
|
||
|
$m
|
$m
|
change
|
|||
|
Revenue
|
|||||
|
Franchised
|
8
|
8
|
-
|
||
|
Managed
|
91
|
90
|
1.1
|
||
|
Owned and leased
|
17
|
19
|
(10.5)
|
||
|
____
|
____
|
_____
|
|||
|
Total
|
116
|
117
|
(0.9)
|
||
|
____
|
____
|
____
|
|||
|
Operating profit before exceptional items
|
|||||
|
Franchised
|
6
|
6
|
-
|
||
|
Managed
|
42
|
42
|
-
|
||
|
Owned and leased
|
1
|
1
|
-
|
||
|
____
|
____
|
_____
|
|||
|
49
|
49
|
-
|
|||
|
Regional overheads
|
(9)
|
(11)
|
18.2
|
||
|
____
|
____
|
____
|
|||
|
Total
|
40
|
38
|
5.3
|
||
|
____
|
____
|
_____
|
|||
|
Hotels
|
Rooms
|
||||
|
AMEA hotel and room count
|
Change over
|
Change over
|
|||
|
2015
30 June
|
2014
31 December
|
2015
30 June
|
2014
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
66
|
(1)
|
20,941
|
(483)
|
|
|
Crowne Plaza
|
68
|
(1)
|
19,335
|
(353)
|
|
|
Hotel Indigo
|
1
|
1
|
146
|
146
|
|
|
Holiday Inn1
|
88
|
3
|
20,301
|
551
|
|
|
Holiday Inn Express
|
27
|
3
|
5,881
|
586
|
|
|
Staybridge Suites
|
3
|
-
|
425
|
-
|
|
|
Other
|
4
|
(1)
|
1,095
|
(199)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
257
|
4
|
68,124
|
248
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
53
|
3
|
12,136
|
567
|
|
|
Managed
|
202
|
1
|
55,401
|
(319)
|
|
|
Owned and leased
|
2
|
-
|
587
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
257
|
4
|
68,124
|
248
|
|
|
____
|
____
|
______
|
_____
|
||
|
Hotels
|
Rooms
|
||||
|
AMEA pipeline
|
Change over
|
Change over
|
|||
|
2015
30 June
|
2014
31 December
|
2015
30 June
|
2014
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
24
|
2
|
6,104
|
300
|
|
|
Crowne Plaza
|
18
|
2
|
4,731
|
319
|
|
|
Hotel Indigo
|
12
|
2
|
2,147
|
324
|
|
|
Holiday Inn1
|
52
|
2
|
18,903
|
5,673
|
|
|
Holiday Inn Express
|
39
|
-
|
8,281
|
104
|
|
|
Staybridge Suites
|
5
|
-
|
900
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
150
|
8
|
41,066
|
6,720
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
6
|
(2)
|
1,518
|
(236)
|
|
|
Managed
|
144
|
10
|
39,548
|
6,956
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
150
|
8
|
41,066
|
6,720
|
|
|
____
|
____
|
______
|
_____
|
||
|
6 months ended 30 June
|
|||||
|
Greater China results
|
2015
|
2014
|
%
|
||
|
$m
|
$m
|
change
|
|||
|
Revenue
|
|||||
|
Franchised
|
2
|
2
|
-
|
||
|
Managed
|
49
|
44
|
11.4
|
||
|
Owned and leased
|
67
|
66
|
1.5
|
||
|
____
|
____
|
____
|
|||
|
Total
|
118
|
112
|
5.4
|
||
|
____
|
____
|
____
|
|||
|
Operating profit before exceptional items
|
|||||
|
Franchised
|
2
|
2
|
-
|
||
|
Managed
|
25
|
25
|
-
|
||
|
Owned and leased
|
18
|
19
|
(5.3)
|
||
|
____
|
____
|
____
|
|||
|
45
|
46
|
(2.2)
|
|||
|
Regional overheads
|
(11)
|
(10)
|
(10.0)
|
||
|
____
|
____
|
____
|
|||
|
Total
|
34
|
36
|
(5.6)
|
||
|
____
|
____
|
____
|
|||
|
Hotels
|
Rooms
|
||||
|
Greater China hotel and room count
|
2015
|
Change
over 2014
|
2015
|
Change
over 2014
|
|
|
30 June
|
31 December
|
30 June
|
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
34
|
1
|
13,819
|
277
|
|
|
HUALUXE
|
2
|
2
|
563
|
563
|
|
|
Crowne Plaza
|
70
|
(3)
|
25,122
|
(991)
|
|
|
Hotel Indigo
|
5
|
-
|
612
|
-
|
|
|
Holiday Inn1
|
72
|
(1)
|
23,263
|
(144)
|
|
|
Holiday Inn Express
|
55
|
-
|
14,022
|
(54)
|
|
|
Other
|
3
|
1
|
529
|
85
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
241
|
-
|
77,930
|
(264)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
4
|
-
|
2,184
|
-
|
|
|
Managed
|
236
|
-
|
75,248
|
(259)
|
|
|
Owned and leased
|
1
|
-
|
498
|
(5)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
241
|
-
|
77,930
|
(264)
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
Hotels
|
Rooms
|
||||
|
Greater China pipeline
|
2015
|
Change
over 2014
|
2015
|
Change
over 2014
|
|
|
30 June
|
31 December
|
30 June
|
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
18
|
-
|
6,667
|
(11)
|
|
|
HUALUXE
|
23
|
(1)
|
7,236
|
(315)
|
|
|
Crowne Plaza
|
44
|
-
|
14,416
|
(385)
|
|
|
Hotel Indigo
|
10
|
-
|
1,646
|
-
|
|
|
Holiday Inn1
|
50
|
7
|
15,142
|
2,758
|
|
|
Holiday Inn Express
|
59
|
9
|
13,220
|
1,942
|
|
|
Other
|
1
|
1
|
279
|
279
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
205
|
16
|
58,606
|
4,268
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Managed
|
205
|
16
|
58,606
|
4,268
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
205
|
16
|
58,606
|
4,268
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
6 months ended 30 June
|
||||
|
2015
|
2014
|
%
|
||
|
Central results
|
$m
|
$m
|
change
|
|
|
Revenue
|
66
|
62
|
6.5
|
|
|
Gross central costs
|
(134)
|
(132)
|
(1.5)
|
|
|
____
|
____
|
____
|
||
|
Net central costs
|
(68)
|
(70)
|
2.9
|
|
|
____
|
____
|
____
|
||
|
· political and economic developments;
|
|
|
· events that adversely impact domestic or international travel;
|
|
|
· the hotel industry supply and demand cycle;
· a competitive and changing industry;
· executing and realising benefits from strategic transactions, including acquisitions;
· the dependency upon a wide range of external stakeholders and business partners;
· increasing competition from online travel agents and intermediaries;
|
|
|
· identifying, securing and retaining franchise and management agreements;
|
|
|
· changing technology and systems;
· its financial stability, ability to borrow and satisfy debt covenants;
· litigation;
|
|
|
· the reputation of its brands including those associated with intellectual property;
· its reliance upon the resilience of its reservations system and other key technology platforms and risks that could cause the failure of these systems;
· information security and data privacy;
· safety, security and crisis management;
|
|
|
· requiring the right people, skills and capability to manage growth and change;
|
|
|
· compliance with existing and changing regulations across numerous countries, territories and jurisdictions;
|
|
|
· ethics and responsible business practices; and
|
|
|
· difficulties insuring its business.
|
|
|
· The condensed set of Financial Statements has been prepared in accordance with IAS 34;
|
|
|
· The Interim Management Report includes a fair review of the important events during the first six months, and their impact on the financial statements and a description of the principal risks and uncertainties for the remaining six months of the year, as required by DTR 4.2.7R; and
|
|
|
· The Interim Management Report includes a fair review of related party transactions and changes therein, as required by DTR 4.2.8R.
|
|
6 months ended 30 June 2015
|
6 months ended 30 June 2014
|
||||||
|
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)
|
915
|
-
|
915
|
908
|
-
|
908
|
|
|
Cost of sales
|
(344)
|
-
|
(344)
|
(378)
|
-
|
(378)
|
|
|
Administrative expenses
|
(188)
|
(11)
|
(199)
|
(180)
|
(24)
|
(204)
|
|
|
Share of losses of associates and joint ventures
|
(1)
|
-
|
(1)
|
-
|
-
|
-
|
|
|
Other operating income and expenses
|
4
|
175
|
179
|
6
|
130
|
136
|
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
||
|
386
|
164
|
550
|
356
|
106
|
462
|
||
|
Depreciation and amortisation
|
(49)
|
-
|
(49)
|
(46)
|
-
|
(46)
|
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
||
|
Operating profit (note 3)
|
337
|
164
|
501
|
310
|
106
|
416
|
|
|
Financial income
|
2
|
-
|
2
|
2
|
-
|
2
|
|
|
Financial expenses
|
(45)
|
-
|
(45)
|
(41)
|
-
|
(41)
|
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
||
|
Profit before tax
|
294
|
164
|
458
|
271
|
106
|
377
|
|
|
Tax (note 5)
|
(88)
|
(2)
|
(90)
|
(89)
|
(49)
|
(138)
|
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
||
|
Profit for the period from continuing operations
|
206
|
162
|
368
|
182
|
57
|
239
|
|
|
====
|
====
|
====
|
====
|
====
|
====
|
||
|
Attributable to:
|
|||||||
|
Equity holders of the parent
|
205
|
162
|
367
|
181
|
57
|
238
|
|
|
Non-controlling interest
|
1
|
-
|
1
|
1
|
-
|
1
|
|
|
____
|
____
|
____
|
____
|
____
|
____
|
||
|
206
|
162
|
368
|
182
|
57
|
239
|
||
|
====
|
====
|
====
|
====
|
====
|
====
|
||
|
Earnings per ordinary share
(note 6)
|
|||||||
|
Continuing and total operations:
|
|||||||
|
Basic
|
156.2¢
|
93.0¢
|
|||||
|
Diluted
|
154.9¢
|
91.9¢
|
|||||
|
Adjusted
|
87.2¢
|
70.7¢
|
|||||
|
Adjusted diluted
|
86.5¢
|
69.9¢
|
|||||
|
=====
|
=====
|
=====
|
=====
|
||||
|
2015
6 months ended 30 June
$m
|
2014
6 months ended 30 June
$m
|
||
|
Profit for the period
|
368
|
239
|
|
|
Other comprehensive income
|
|||
|
Items that may be subsequently reclassified to profit or loss:
|
|||
|
Gains on valuation of available-for-sale financial assets, net of related tax charge of $nil (2014 $1m)
|
4
|
13
|
|
|
Exchange losses on retranslation of foreign operations, net of related tax credit of $3m (2014 $1m)
|
(5)
|
(8)
|
|
|
Exchange losses reclassified to profit on hotel disposal (note 9)
|
2
|
-
|
|
|
____
|
____
|
||
|
1
|
5
|
||
|
Items that will not be reclassified to profit or loss:
|
|||
|
Re-measurement gains/(losses) on defined benefit plans, net of related tax charge of $4m (2014 tax credit of $3m)
|
8
|
(8)
|
|
|
____
|
____
|
||
|
Total other comprehensive income/(loss) for the period
|
9
|
(3)
|
|
|
____
|
____
|
||
|
Total comprehensive income for the period
|
377
|
236
|
|
|
====
|
====
|
||
|
Attributable to:
|
|||
|
Equity holders of the parent
|
376
|
234
|
|
|
Non-controlling interest
|
1
|
2
|
|
|
____
|
____
|
||
|
377
|
236
|
||
|
====
|
====
|
||
|
6 months ended 30 June 2015
|
|||||
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
At beginning of the period
|
178
|
(2,539)
|
1,636
|
8
|
(717)
|
|
Total comprehensive income for the period
|
-
|
1
|
375
|
1
|
377
|
|
Movement in shares in employee share trusts
|
-
|
15
|
(62)
|
-
|
(47)
|
|
Equity-settled share-based cost
|
-
|
-
|
14
|
-
|
14
|
|
Tax related to share schemes
|
-
|
-
|
3
|
-
|
3
|
|
Equity dividends paid
|
-
|
-
|
(125)
|
-
|
(125)
|
|
Exchange adjustments
|
1
|
(1)
|
-
|
-
|
-
|
|
_____
|
______
|
_____
|
____
|
____
|
|
|
At end of the period
|
179
|
(2,524)
|
1,841
|
9
|
(495)
|
|
=====
|
=====
|
=====
|
====
|
====
|
|
|
6 months ended 30 June 2014
|
|||||
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
At beginning of the period
|
189
|
(2,605)
|
2,334
|
8
|
(74)
|
|
Total comprehensive income for the period
|
-
|
4
|
230
|
2
|
236
|
|
Repurchase of shares
|
-
|
-
|
(110)
|
-
|
(110)
|
|
Movement in shares in employee share trusts
|
-
|
20
|
(59)
|
-
|
(39)
|
|
Equity-settled share-based cost
|
-
|
-
|
14
|
-
|
14
|
|
Tax related to share schemes
|
-
|
-
|
7
|
-
|
7
|
|
Equity dividends paid
|
-
|
-
|
(122)
|
(1)
|
(123)
|
|
Exchange adjustments
|
5
|
(5)
|
-
|
-
|
-
|
|
_____
|
_____
|
____
|
____
|
____
|
|
|
At end of the period
|
194
|
(2,586)
|
2,294
|
9
|
(89)
|
|
=====
|
=====
|
====
|
====
|
====
|
|
|
*
|
Other reserves comprise the capital redemption reserve, shares held by employee share trusts, other reserves, unrealised gains and losses reserve and currency translation reserve.
|
|
All items above are shown net of tax.
|
|
|
2015
30 June
|
2014
31 December
|
|
|
$m
|
$m
|
|
|
ASSETS
|
||
|
Property, plant and equipment
|
459
|
741
|
|
Goodwill
|
236
|
74
|
|
Intangible assets
|
881
|
569
|
|
Investment in associates and joint ventures
|
128
|
116
|
|
Trade and other receivables
|
6
|
3
|
|
Retirement benefit assets
|
-
|
8
|
|
Other financial assets
|
284
|
252
|
|
Non-current tax receivable
|
28
|
34
|
|
Deferred tax assets
|
71
|
87
|
|
_____
|
_____
|
|
|
Total non-current assets
|
2,093
|
1,884
|
|
_____
|
_____
|
|
|
Inventories
|
3
|
3
|
|
Trade and other receivables
|
617
|
448
|
|
Current tax receivable
|
11
|
4
|
|
Derivative financial instruments
|
-
|
2
|
|
Other financial assets
|
-
|
5
|
|
Cash and cash equivalents
|
205
|
162
|
|
______
|
______
|
|
|
Total current assets
|
836
|
624
|
|
Assets classified as held for sale
|
306
|
310
|
|
______
|
______
|
|
|
Total assets (note 3)
|
3,235
|
2,818
|
|
=====
|
=====
|
|
|
LIABILITIES
|
||
|
Loans and other borrowings
|
(525)
|
(126)
|
|
Trade and other payables
|
(821)
|
(769)
|
|
Provisions
|
(13)
|
(1)
|
|
Current tax payable
|
(47)
|
(47)
|
|
______
|
______
|
|
|
Total current liabilities
|
(1,406)
|
(943)
|
|
______
|
______
|
|
|
Loans and other borrowings
|
(1,390)
|
(1,569)
|
|
Retirement benefit obligations
|
(135)
|
(146)
|
|
Trade and other payables
|
(632)
|
(627)
|
|
Provisions
|
(1)
|
(9)
|
|
Deferred tax liabilities
|
(143)
|
(147)
|
|
______
|
_____
|
|
|
Total non-current liabilities
|
(2,301)
|
(2,498)
|
|
Liabilities classified as held for sale
|
(23)
|
(94)
|
|
______
|
______
|
|
|
Total liabilities
|
(3,730)
|
(3,535)
|
|
=====
|
=====
|
|
|
Net liabilities
|
(495)
|
(717)
|
|
=====
|
=====
|
|
|
EQUITY
|
||
|
Equity share capital
|
179
|
178
|
|
Capital redemption reserve
|
12
|
12
|
|
Shares held by employee share trusts
|
(20)
|
(35)
|
|
Other reserves
|
(2,897)
|
(2,896)
|
|
Unrealised gains and losses reserve
|
115
|
111
|
|
Currency translation reserve
|
266
|
269
|
|
Retained earnings
|
1,841
|
1,636
|
|
______
|
______
|
|
|
IHG shareholders' equity
|
(504)
|
(725)
|
|
Non-controlling interest
|
9
|
8
|
|
______
|
______
|
|
|
Total equity
|
(495)
|
(717)
|
|
=====
|
=====
|
|
2015
6 months ended
30 June
|
2014
6 months ended
30 June
|
|||
|
$m
|
$m
|
|||
|
Profit for the period
|
368
|
239
|
||
|
Adjustments for:
|
||||
|
Net financial expenses
|
43
|
39
|
||
|
Income tax charge
|
90
|
138
|
||
|
Depreciation and amortisation
|
49
|
46
|
||
|
Exceptional operating items
|
(164)
|
(106)
|
||
|
Equity-settled share-based cost
|
11
|
10
|
||
|
Dividends from associates and joint ventures
|
2
|
1
|
||
|
Other items
|
1
|
-
|
||
|
_____
|
_____
|
|||
|
Operating cash flow before movements in working capital
|
400
|
367
|
||
|
Net change in loyalty programme liability and System Fund surplus
|
107
|
99
|
||
|
Other changes in net working capital
|
(160)
|
(180)
|
||
|
Retirement benefit contributions, net of cost
|
(1)
|
(2)
|
||
|
Cash flows relating to exceptional operating items
|
(33)
|
(9)
|
||
|
_____
|
_____
|
|||
|
Cash flow from operations
|
313
|
275
|
||
|
Interest paid
|
(15)
|
(12)
|
||
|
Interest received
|
1
|
1
|
||
|
Tax paid on operating activities
|
(72)
|
(59)
|
||
|
_____
|
_____
|
|||
|
Net cash from operating activities
|
227
|
205
|
||
|
_____
|
_____
|
|||
|
Cash flow from investing activities
|
||||
|
Purchase of property, plant and equipment
|
(27)
|
(43)
|
||
|
Purchase of intangible assets
|
(58)
|
(47)
|
||
|
Investment in other financial assets
|
(20)
|
-
|
||
|
Investment in associates and joint ventures
|
(16)
|
(8)
|
||
|
Loan advances to associates and joint ventures
|
(2)
|
-
|
||
|
Acquisition of business, net of cash acquired (note 8)
|
(438)
|
-
|
||
|
Capitalised interest paid
|
(2)
|
-
|
||
|
Disposal of hotel assets, net of costs and cash disposed (note 9)
|
363
|
346
|
||
|
Proceeds from other financial assets
|
6
|
13
|
||
|
_____
|
_____
|
|||
|
Net cash from investing activities
|
(194)
|
261
|
||
|
_____
|
_____
|
|||
|
Cash flow from financing activities
|
||||
|
Purchase of own shares
|
-
|
(110)
|
||
|
Purchase of own shares by employee share trusts
|
(47)
|
(49)
|
||
|
Dividends paid to shareholders
|
(125)
|
(122)
|
||
|
Dividends paid to non-controlling interests
|
-
|
(1)
|
||
|
Proceeds from foreign exchange swaps
|
22
|
-
|
||
|
New borrowings
|
400
|
-
|
||
|
Decrease in other borrowings
|
(208)
|
-
|
||
|
_____
|
_____
|
|||
|
Net cash from financing activities
|
42
|
(282)
|
||
|
_____
|
_____
|
|||
|
Net movement in cash and cash equivalents in the period
|
75
|
184
|
||
|
Cash and cash equivalents, net of overdrafts, at beginning of the period
|
55
|
134
|
||
|
Exchange and other adjustments
|
(31)
|
(10)
|
||
|
_____
|
_____
|
|||
|
Cash and cash equivalents, net of overdrafts, at end of the period
|
99
|
308
|
||
|
=====
|
=====
|
|||
|
1.
|
Basis of preparation
|
|
These condensed interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority and IAS 34 'Interim Financial Reporting' and have been prepared on a consistent basis using the same accounting policies set out in the InterContinental Hotels Group PLC (the Group or IHG) Annual Report and Form 20-F for the year ended 31 December 2014.
The Directors are satisfied that the Group has sufficient resources to continue in operation for the foreseeable future, being a period of not less than 12 months from the date of this report. Accordingly, the financial statements continue to be prepared on a going concern basis.
These condensed interim financial statements are unaudited and do not constitute statutory accounts of the Group within the meaning of Section 435 of the Companies Act 2006. The auditors have carried out a review of the financial information in accordance with the guidance contained in ISRE 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board.
The financial information for the year ended 31 December 2014 has been extracted from the Group's published financial statements for that year which were prepared in accordance with IFRSs as adopted by the European Union and which have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified with no reference to matters to which the auditor drew attention by way of emphasis and no statement under s498(2) or s498(3) of the Companies Act 2006.
|
|
2.
|
Exchange rates
|
|
The results of operations have been translated into US dollars at the average rates of exchange for the period. In the case of sterling, the translation rate is $1=£0.66 (2014 $1=£0.60). In the case of the euro, the translation rate is $1 = €0.90 (2014 $1 = €0.73).
Assets and liabilities have been translated into US dollars at the rates of exchange on the last day of the period. In the case of sterling, the translation rate is $1=£0.64 (2014 30 June $1 = £0.59; 31 December $1 = £0.64). In the case of the euro, the translation rate is $1 = €0.89 (2014 30 June $1 = €0.73; 31 December $1 = €0.82).
|
|
3.
|
Segmental information
|
||
|
Revenue
|
2015
6 months ended
30 June
|
2014
6 months ended
30 June
|
|
|
$m
|
$m
|
||
|
Americas
|
471
|
435
|
|
|
Europe
|
144
|
182
|
|
|
AMEA
|
116
|
117
|
|
|
Greater China
|
118
|
112
|
|
|
Central
|
66
|
62
|
|
|
____
|
____
|
||
|
Total revenue
|
915
|
908
|
|
|
====
|
====
|
||
|
All results relate to continuing operations.
|
|||
|
Profit
|
2015
6 months ended
30 June
$m
|
2014
6 months ended
30 June
$m
|
|
|
Americas
|
295
|
268
|
|
|
Europe
|
36
|
38
|
|
|
AMEA
|
40
|
38
|
|
|
Greater China
|
34
|
36
|
|
|
Central
|
(68)
|
(70)
|
|
|
____
|
____
|
||
|
Reportable segments' operating profit
|
337
|
310
|
|
|
Exceptional operating items (note 4)
|
164
|
106
|
|
|
____
|
____
|
||
|
Operating profit
|
501
|
416
|
|
|
Financial income
|
2
|
2
|
|
|
Financial expenses
|
(45)
|
(41)
|
|
|
____
|
____
|
||
|
Profit before tax
|
458
|
377
|
|
|
====
|
====
|
||
|
All results relate to continuing operations.
|
|||
|
Assets
|
2015
30 June
$m
|
2014
31 December
$m
|
|
|
Americas
|
1,487
|
919
|
|
|
Europe
|
434
|
626
|
|
|
AMEA
|
246
|
244
|
|
|
Greater China
|
390
|
394
|
|
|
Central
|
363
|
346
|
|
|
____
|
____
|
||
|
Segment assets
|
2,920
|
2,529
|
|
|
Unallocated assets:
|
|||
|
Non-current tax receivable
|
28
|
34
|
|
|
Deferred tax assets
|
71
|
87
|
|
|
Current tax receivable
|
11
|
4
|
|
|
Derivative financial instruments
|
-
|
2
|
|
|
Cash and cash equivalents
|
205
|
162
|
|
|
____
|
____
|
||
|
Total assets
|
3,235
|
2,818
|
|
|
====
|
====
|
|
4.
|
Exceptional items
|
||||
|
2015
6 months ended
30 June
$m
|
2014
6 months ended
30 June
$m
|
||||
|
Continuing operations:
|
|||||
|
Exceptional operating items
|
|||||
|
Administrative expenses:
|
|||||
|
Kimpton integration costs (a)
|
(4)
|
-
|
|||
|
Venezuelan currency losses (b)
|
(4)
|
(14)
|
|||
|
Restructuring costs (c)
|
(3)
|
(10)
|
|||
|
____
|
____
|
||||
|
(11)
|
(24)
|
||||
|
Other operating income and expenses:
|
|||||
|
Gain on disposal of hotel assets (d)
|
175
|
130
|
|||
|
____
|
____
|
||||
|
164
|
106
|
||||
|
====
|
====
|
||||
|
Tax
|
|||||
|
Tax on exceptional operating items (e)
|
(2)
|
(49)
|
|||
|
____
|
____
|
||||
|
(2)
|
(49)
|
||||
|
====
|
====
|
||||
|
These items are treated as exceptional by reason of their size or nature.
|
||
|
a)
|
Relates to the initial costs of integrating Kimpton into the operations of the Group (see note 8).
|
|
|
b)
|
Arises from changes to the Venezuelan exchange rate mechanisms and the adoption of the SIMADI exchange rate in 2015 and the SICAD II exchange rate in 2014.
|
|
|
c)
|
Relates to a continuation of a restructuring of the Group's corporate functions.
|
|
|
d)
|
In 2015, arose from the sale of InterContinental Paris - Le Grand and, in 2014, from the sale of InterContinental Mark Hopkins San Francisco and the disposal of an 80% interest in InterContinental New York Barclay (see note 9).
|
|
|
e)
|
Relates to tax charges of $16m on the sale of InterContinental Paris - Le Grand, offset by tax relief of $4m in respect of the Kimpton acquisition, $3m on other current year exceptional costs and a credit of $7m relating to deferred tax adjustments arising from exceptional transactions in prior years.
|
|
|
5.
|
Tax
|
|
The tax charge on profit for the period from continuing operations, excluding the impact of exceptional items (note 4), has been calculated using an interim effective tax rate of 30% (2014 33%) analysed as follows:
|
|
2015
|
2015
|
2015
|
2014
|
2014
|
2014
|
||||||
|
6 months ended 30 June
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
|||||
|
Before exceptional items
|
294
|
(88)
|
30%
|
271
|
(89)
|
33%
|
|||||
|
Exceptional items
|
164
|
(2)
|
106
|
(49)
|
|||||||
|
____
|
____
|
____
|
____
|
||||||||
|
458
|
(90)
|
377
|
(138)
|
||||||||
|
====
|
====
|
====
|
====
|
||||||||
|
Analysed as:
|
|||||||||||
|
UK tax
|
(3)
|
(2)
|
|||||||||
|
Foreign tax
|
(87)
|
(136)
|
|||||||||
|
____
|
____
|
||||||||||
|
(90)
|
(138)
|
||||||||||
|
====
|
====
|
||||||||||
|
6.
|
Earnings per ordinary share
|
|
Basic earnings per ordinary share is calculated by dividing the profit for the period available for IHG equity holders by the weighted average number of ordinary shares, excluding investment in own shares, in issue during the period.
Diluted earnings per ordinary share is calculated by adjusting basic earnings per ordinary share to reflect the notional impact of the weighted average number of dilutive ordinary share awards outstanding during the period.
Adjusted earnings per ordinary share is disclosed in order to show performance undistorted by exceptional items, to give a more meaningful comparison of the Group's performance.
|
|
Continuing and total operations
|
2015
6 months ended 30 June
|
2014
6 months
ended 30 June
|
||
|
Basic earnings per ordinary share
|
||||
|
Profit available for equity holders ($m)
|
367
|
238
|
||
|
Basic weighted average number of ordinary shares (millions)
|
235
|
256
|
||
|
Basic earnings per ordinary share (cents)
|
156.2
|
93.0
|
||
|
====
|
====
|
|||
|
Diluted earnings per ordinary share
|
||||
|
Profit available for equity holders ($m)
|
367
|
238
|
||
|
Diluted weighted average number of ordinary shares (millions)
|
237
|
259
|
||
|
Diluted earnings per ordinary share (cents)
|
154.9
|
91.9
|
||
|
====
|
====
|
|||
|
Adjusted earnings per ordinary share
|
||||
|
Profit available for equity holders ($m)
|
367
|
238
|
||
|
Adjusting items (note 4):
|
||||
|
Exceptional operating items ($m)
|
(164)
|
(106)
|
||
|
Tax on exceptional operating items ($m)
|
2
|
49
|
||
|
____
|
____
|
|||
|
Adjusted earnings ($m)
|
205
|
181
|
||
|
Basic weighted average number of ordinary shares (millions)
|
235
|
256
|
||
|
Adjusted earnings per ordinary share (cents)
|
87.2
|
70.7
|
||
|
====
|
====
|
|||
|
Diluted weighted average number of ordinary shares (millions)
|
237
|
259
|
||
|
Adjusted diluted earnings per ordinary share (cents)
|
86.5
|
69.9
|
||
|
====
|
====
|
|||
|
The diluted weighted average number of ordinary shares is calculated as:
|
|||
|
2015
millions
|
2014
millions
|
||
|
Basic weighted average number of ordinary shares
|
235
|
256
|
|
|
Dilutive potential ordinary shares
|
2
|
3
|
|
|
____
|
____
|
||
|
237
|
259
|
||
|
====
|
====
|
||
|
7.
|
Dividends and shareholder returns
|
|||||
|
2015
cents per share
|
2014
cents per share
|
2015
$m
|
2014
$m
|
|||
|
Paid during the period:
|
||||||
|
Final (declared for previous year)
|
52.0
|
47.0
|
125
|
122
|
||
|
=====
|
=====
|
====
|
====
|
|||
|
Proposed for the period:
|
||||||
|
Interim
|
27.5
|
25.0
|
65
|
57*
|
||
|
=====
|
=====
|
====
|
====
|
|||
|
*Amount paid
|
||||||
|
The total number of shares held as treasury shares at 30 June 2015 was 11.5m.
|
||||||
|
8.
|
Acquisition of business
|
|
On 16 January 2015, the Group completed the acquisition of Kimpton Hotel & Restaurant Group, LLC ('Kimpton'), an unlisted company based in the US. Kimpton is the world's largest independent boutique hotel operator and the acquisition makes IHG the market leader in the boutique segment.
|
|
The fair values of the identifiable assets and liabilities of Kimpton at the date of acquisition were as follows:
|
|||||
|
$m
|
|||||
|
Property, plant and equipment
|
3
|
||||
|
Identifiable intangible assets
|
266
|
||||
|
Other financial assets
|
10
|
||||
|
Trade and other receivables
|
29
|
||||
|
Cash and cash equivalents
|
3
|
||||
|
Trade and other payables
|
(27)
|
||||
|
Non-current liabilities
|
(10)
|
||||
|
____
|
|||||
|
Net identifiable assets acquired
|
274
|
||||
|
Goodwill
|
167
|
||||
|
____
|
|||||
|
Total purchase consideration
|
441
|
||||
|
====
|
|||||
|
Net cash outflow arising on acquisition:
|
|||
|
$m
|
|||
|
Cash consideration, including working capital payment of $11m
|
441
|
||
|
Less: cash and cash equivalents acquired
|
(3)
|
||
|
____
|
|||
|
438
|
|||
|
====
|
|||
|
The fair value of the identifiable intangible assets, comprising brands and management contracts, is provisional pending receipt of the final valuation report for those assets.
The goodwill is mainly attributable to the international growth opportunities identified for the acquired business, plus cost synergies expected to arise. The amount of goodwill that is expected to be deductible for income tax purposes is $165m.
|
||
|
Included in trade and other receivables are trade receivables with a gross contractual value of $26m, which are expected to be collectable in full. The fair value of trade receivables approximates the book value of $26m.
No contingent liabilities were recognised as a result of the acquisition.
Kimpton contributed revenue of $33m and operating profit of $14m for the period between the date of acquisition and the balance sheet date. The results of Kimpton are included in the Americas business segment.
If the acquisition had taken place at 1 January 2015, there would have been no material difference to reported Group revenue and operating profit for the six months ended 30 June 2015.
|
||
|
Acquisition transaction costs of $7m were charged to exceptional administrative expenses in the year ended 31 December 2014.
|
||
|
9.
|
Disposal of hotel assets
|
|||
|
On 20 May 2015, the Group completed the sale of its interests in InterContinental Paris - Le Grand. This hotel was classified as an asset held for sale at 31 December 2014.
In the six month period to 30 June 2014, the Group completed the sale of InterContinental Mark Hopkins San Francisco on 27 March 2014 and the disposal of an 80.1% interest in InterContinental New York Barclay on 31 March 2014.
|
||||
|
2015
6 months
ended
30 June
$m
|
2014
6 months
ended
30 June
$m
|
|||
|
Net assets disposed:
|
||||
|
Property, plant and equipment
|
-
|
91
|
||
|
Assets classified as held for sale, including cash and cash equivalents
|
310
|
223
|
||
|
Liabilities classified as held for sale
|
(87)
|
-
|
||
|
Net current liabilities
|
-
|
(4)
|
||
|
______
|
_____
|
|||
|
223
|
310
|
|||
|
Gain on disposal of hotel assets (note 4)
|
175
|
130
|
||
|
Accrued disposal costs
|
-
|
5
|
||
|
Exchange losses reclassified from currency translation reserve
|
2
|
-
|
||
|
_____
|
_____
|
|||
|
Total consideration
|
400
|
445
|
||
|
=====
|
====
|
|||
|
Satisfied by:
|
||||
|
Cash consideration, net of costs paid
|
367
|
346
|
||
|
Other financial asset
|
-
|
27
|
||
|
Intangible assets - management contracts
|
33
|
50
|
||
|
Investment in associate
|
-
|
22
|
||
|
_____
|
_____
|
|||
|
400
|
445
|
|||
|
=====
|
====
|
|||
|
Net cash inflow arising on disposals:
|
||||
|
$m
|
$m
|
|||
|
Cash consideration, net of costs paid
|
367
|
346
|
||
|
Less: cash and cash equivalents disposed
|
(4)
|
-
|
||
|
_____
|
_____
|
|||
|
363
|
346
|
|||
|
=====
|
====
|
|||
|
10.
|
Net debt
|
|||
|
2015
30 June
|
2014
31 December
|
|||
|
$m
|
$m
|
|||
|
Cash and cash equivalents
|
205
|
162
|
||
|
Loans and other borrowings - current
|
(525)
|
(126)
|
||
|
Loans and other borrowings - non-current
|
(1,390)
|
(1,569)
|
||
|
____
|
____
|
|||
|
Net debt
|
(1,710)
|
(1,533)
|
||
|
====
|
====
|
|||
|
Finance lease liability included above
|
(223)
|
(218)
|
||
|
====
|
====
|
|||
|
11.
|
Movement in net debt
|
|||
|
2015
6 months ended
30 June
|
2014
6 months
ended
30 June
|
|||
|
$m
|
$m
|
|||
|
Net increase in cash and cash equivalents, net of overdrafts
|
75
|
184
|
||
|
Add back cash flows in respect of other components of net debt:
|
||||
|
New borrowings
|
(400)
|
-
|
||
|
Decrease in other borrowings
|
208
|
-
|
||
|
_____
|
_____
|
|||
|
(Increase)/decrease in net debt arising from cash flows
|
(117)
|
184
|
||
|
Non-cash movements:
|
||||
|
Finance lease obligations
|
(2)
|
(2)
|
||
|
Exchange and other adjustments
|
(58)
|
(60)
|
||
|
_____
|
_____
|
|||
|
(Increase)/decrease in net debt
|
(177)
|
122
|
||
|
Net debt at beginning of the period
|
(1,533)
|
(1,153)
|
||
|
_____
|
_____
|
|||
|
Net debt at end of the period
|
(1,710)
|
(1,031)
|
||
|
=====
|
=====
|
|||
|
12.
|
Fair values
|
||||
|
The table below compares carrying amounts and fair values of the Group's financial assets and liabilities at 30 June 2015:
|
|||||
|
2015
30 June
Carrying value
$m
|
2015
30 June
Fair value
$m
|
2014
31 December
Carrying value
$m
|
2014
31 December
Fair value
$m
|
||
|
Financial assets:
|
|||||
|
Equity securities available-for-sale
|
156
|
156
|
144
|
144
|
|
|
Loans and receivables
|
128
|
128
|
113
|
113
|
|
|
Derivatives
|
-
|
-
|
2
|
2
|
|
|
_____
|
_____
|
_____
|
_____
|
||
|
284
|
284
|
259
|
259
|
||
|
=====
|
=====
|
=====
|
=====
|
||
|
Financial liabilities:
|
|||||
|
£250m 6% bonds 2016
|
(405)
|
(416)
|
(390)
|
(423)
|
|
|
£400m 3.875% bonds 2022
|
(635)
|
(647)
|
(618)
|
(659)
|
|
|
Finance lease obligations
|
(223)
|
(270)
|
(218)
|
(277)
|
|
|
Unsecured bank loans
|
(544)
|
(544)
|
(359)
|
(359)
|
|
|
Secured bank loan
|
(2)
|
(2)
|
(3)
|
(3)
|
|
|
_____
|
_____
|
_____
|
_____
|
||
|
(1,809)
|
(1,879)
|
(1,588)
|
(1,721)
|
||
|
=====
|
=====
|
=====
|
=====
|
||
|
Cash and cash equivalents, trade and other receivables, bank overdrafts, trade and other payables and provisions are excluded from the above table as their fair value approximates book value. The fair value of loans and receivables approximates book value based on prevailing market rates. The fair value of the £250m and £400m bonds is based on their quoted market price. The fair value of finance lease obligations is calculated by discounting future cash flows at prevailing interest rates. The fair value of other borrowings approximates book value as interest rates reset to market rates on a frequent basis. Equity securities available-for-sale and derivatives are held in the Group statement of financial position at fair value as set out in the following table.
|
|
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
|
|
30 June 2015
|
Level 1
$m
|
Level 2
$m
|
Level 3
$m
|
Total
$m
|
|
|
Assets
|
|||||
|
Equity securities available-for-sale:
|
|||||
|
Quoted equity shares
|
14
|
-
|
-
|
14
|
|
|
Unquoted equity shares
|
-
|
-
|
142
|
142
|
|
|
31 December 2014
|
Level 1
$m
|
Level 2
$m
|
Level 3
$m
|
Total
$m
|
|
|
Assets
|
|||||
|
Equity securities available-for-sale:
|
|||||
|
Quoted equity shares
|
16
|
-
|
-
|
16
|
|
|
Unquoted equity shares
|
-
|
-
|
128
|
128
|
|
|
Derivatives
|
-
|
2
|
-
|
2
|
|
|
The Level 2 derivatives consist of foreign exchange swaps which are valued using data from observable swap curves, adjusted to take account of the Group's own credit risk.
The Level 3 equity securities relate to investments in unlisted shares which are valued either by applying an average price-earnings (P/E) ratio for a competitor group to the earnings generated by the investment, or by reference to share of net assets if the investment is currently loss-making or a recent property valuation is available. The average P/E ratio for the period was 24.7 (2014 31 December 24.0) and a non-marketability factor of 30% (2014 31 December 30%) was applied.
A 10% increase in the average P/E ratio would result in a $3m increase (2014 31 December $3m) in the fair value of the investments and a 10% decrease in the average P/E ratio would result in a $3m decrease (2014 31 December $3m) in the fair value of the investments. A 10% increase in net assets would result in a $8m increase (2014 31 December $7m) in the fair value of investments and a 10% decrease in net assets would result in a $8m decrease (2014 31 December $7m) in the fair value of the investments.
There were no transfers between Level 1 and Level 2 fair value measurements during the period and no transfers into and out of Level 3.
The following table reconciles movements in instruments classified as Level 3 during the period:
|
|||||
|
$m
|
|||||
|
At 1 January 2015
|
128
|
||||
|
Additions
|
8
|
||||
|
Valuation gains recognised in other comprehensive income
|
6
|
||||
|
____
|
|||||
|
At 30 June 2015
|
142
|
||||
|
====
|
|||||
|
13.
|
Loyalty programme liability
|
|||
|
Following the announcement on 14 April 2015 of the introduction of an expiry policy for points earned under the Group's loyalty programme, IHG Rewards Club, the Group has released $156m from the programme's future redemption liability. The amount released was based on the advice of an external actuary who used statistical models to estimate the impact of the programme change on members' behaviour. The liability release has resulted in a corresponding increase in the System Fund surplus which is also recorded on the Group statement of financial position.
|
||||
|
14.
|
Commitments and contingencies
|
|
At 30 June 2015, the amount contracted for but not provided for in the financial statements for expenditure on property, plant and equipment and intangible assets was $103m (2014 31 December $117m). The Group has also committed to invest in a number of its associates, with an estimated outstanding commitment of $77m at 30 June 2015 based on current forecasts (2014 31 December $89m).
At 30 June 2015, the Group had no contingent liabilities (2014 31 December $nil).
In limited cases, the Group may provide performance guarantees to third-party hotel owners to secure management contracts. At 30 June 2015, the amount provided in the financial statements was $nil (2014 31 December $2m) and the maximum unprovided exposure under such guarantees was $13m (2014 31 December $29m).
In limited cases, the Group may guarantee bank loans provided to facilitate third-party ownership of hotels in which the Group has an equity interest and also a management contract. At 30 June 2015, there were guarantees of $38m in place (2014 31 December $20m).
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 a claim by Pan American Life Insurance Company, a Competition and Markets Authority 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.
|
|
|
15.
|
Events after the reporting period
|
|||
|
On 10 July 2015, the Group announced the sale of the InterContinental Hong Kong for a gross purchase price of US$938m. The buyer has paid a non-refundable deposit of US$94m, with the remaining proceeds payable in cash on completion, expected in the second half of 2015. The Group will retain a 37-year management contract on the hotel, with three 10-year extension rights. The hotel was classified as an asset held for sale at 30 June 2015.
|
||||
|
INDEPENDENT REVIEW REPORT TO INTERCONTINENTAL HOTELS GROUP PLC
|
|
Introduction
We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 which comprises the Group income statement, Group statement of comprehensive income, Group statement of changes in equity, Group statement of financial position, Group statement of cash flows and the related notes 1 to 15. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) , 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of half-yearly financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2015 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
29 July 2015
|
|
InterContinental Hotels Group PLC
|
||
|
(Registrant)
|
||
|
By:
|
/s/ H. Patel
|
|
|
Name:
|
H. PATEL
|
|
|
Title:
|
COMPANY SECRETARIAL OFFICER
|
|
|
Date:
|
30 July 2015
|
|