|
99.1
|
Half-year
Report dated 06 August 2019
|
|
|
|
|
|
|
|
|
|
|
Reported
|
|
Underlying5
|
|
||
2019
|
2018 Restated1
|
% Change
|
|
% Change
|
|
|
REPORTABLE SEGMENTS2
|
|
|
|
|
|
|
Revenue3
|
$1,012m
|
$900m
|
12%
|
|
13%
|
|
Revenue from fee business
|
$730m
|
$719m
|
2%
|
|
3%
|
|
Operating profit3
|
$410m
|
$413m
|
(1)%
|
|
2%
|
|
Fee margin4
|
53.7%
|
53.9%
|
(0.2)%pts
|
|
0.3%pts
|
|
Adjusted EPS
|
143.2¢
|
145.3¢
|
(1)%
|
|
2%
|
|
|
|
|
|
|
|
|
GROUP RESULTS6
|
|
|
|
|
|
|
Total revenue
|
$2,280m
|
$2,113m
|
8%
|
|
KEY METRICS
|
|
Operating profit
|
$457m
|
$401m
|
14%
|
|
● $13.6bn total gross
revenue (up 2%; 5% at CER)
|
|
Basic EPS
|
167.2¢
|
122.6¢
|
36%
|
|
||
Interim dividend per share
|
39.9¢
|
36.3¢
|
10%
|
|
● 0.1% global H1
RevPAR (Q2 = (0.2)%)
|
|
Net debt
|
$2,847m
|
$2,198m
|
30%
|
|
Appendix 1: RevPAR Movement Summary
|
||||||
|
Half Year 2019
|
Q2 2019
|
||||
RevPAR
|
Rate
|
Occ.
|
RevPAR
|
Rate
|
Occ.
|
|
Group
|
0.1%
|
0.4%
|
(0.2)%pts
|
(0.2)%
|
0.3%
|
(0.4)%pts
|
Americas
|
0.1%
|
0.8%
|
(0.5)%pts
|
(0.5)%
|
0.6%
|
(0.8)%pts
|
EMEAA
|
0.2%
|
(0.4)%
|
0.5%pts
|
0.7%
|
0.1%
|
0.4%pts
|
G.
China
|
(0.3)%
|
(0.5)%
|
0.2%pts
|
(0.5)%
|
(1.2)%
|
0.5%pts
|
Appendix 2: Comparable RevPAR movement at constant exchange rates
(CER) vs. actual exchange rates (AER)
|
||||||
|
Half Year 2019
|
Q2 2019
|
||||
CER
|
AER
|
Difference
|
CER
|
AER
|
Difference
|
|
Group
|
0.1%
|
(2.0)%
|
(2.1)%pts
|
(0.2)%
|
(2.0)%
|
(1.8)%pts
|
Americas
|
0.1%
|
(0.4)%
|
(0.5)%pts
|
(0.5)%
|
(0.8)%
|
(0.3)%pts
|
EMEAA
|
0.2%
|
(4.7)%
|
(5.0)%pts
|
0.7%
|
(3.7)%
|
(4.4)%pts
|
G.
China
|
(0.3)%
|
(5.5)%
|
(5.2)%pts
|
(0.5)%
|
(6.1)%
|
(5.6)%pts
|
Appendix 3: Half Year System & Pipeline Summary
(rooms)
|
|
||||||||||||||
|
System
|
Pipeline
|
|||||||||||||
Openings
|
Removals
|
Net
|
Total
|
YoY%
|
Signings
|
Total
|
|||||||||
Group
|
29,660
|
(10,286)
|
19,374
|
855,915
|
5.7%
|
47,796
|
281,845
|
||||||||
Americas
|
10,994
|
(6,414)
|
4,580
|
514,709
|
2.7%
|
14,030
|
118,530
|
||||||||
EMEAA
|
5,880
|
(1,961)
|
3,919
|
215,018
|
6.5%
|
11,347
|
78,017
|
||||||||
G.
China
|
12,786
|
(1,911)
|
10,875
|
126,188
|
18.2%
|
22,419
|
85,298
|
|
GROUP
|
REPORTABLE SEGMENTS
|
||||||||
|
Total
|
Americas
|
EMEAA
|
G. China
|
Central
|
|||||
2019
|
2018*
|
2019
|
2018*
|
2019
|
2018*
|
2019
|
2018*
|
2019
|
2018*
|
|
Revenue
($m)
|
|
|
|
|
|
|
|
|
|
|
Revenue from reportable segments
|
1,012
|
900
|
520
|
514
|
338
|
233
|
66
|
69
|
88
|
84
|
System
Fund result
|
675
|
618
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Hotel
Cost Reimbursements
|
593
|
595
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Group Revenue
|
2,280
|
2,113
|
520
|
514
|
338
|
233
|
66
|
69
|
88
|
84
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
($m)
|
|
|
|
|
|
|
|
|
|
|
Fee
Business
|
452
|
439
|
323
|
312
|
93
|
95
|
36
|
32
|
-
|
-
|
Owned,
leased & managed lease
|
16
|
22
|
21
|
22
|
(5)
|
-
|
-
|
-
|
-
|
-
|
Central
overheads
|
(58)
|
(48)
|
-
|
-
|
-
|
-
|
-
|
-
|
(58)
|
(48)
|
Operating profit from reportable segments before
exceptionals
|
410
|
413
|
344
|
334
|
88
|
95
|
36
|
32
|
(58)
|
(48)
|
System
Fund result
|
47
|
(12)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
Operating profit before exceptionals
|
457
|
401
|
344
|
334
|
88
|
95
|
36
|
32
|
(58)
|
(48)
|
Exceptional
items
|
(15)
|
(53)
|
(2)
|
(15)
|
(2)
|
(5)
|
-
|
-
|
(11)
|
(33)
|
Operating Profit after exceptionals
|
442
|
348
|
342
|
319
|
86
|
90
|
36
|
32
|
(69)
|
(81)
|
|
Total***
|
Americas
|
EMEAA
|
G. China
|
||||
Reported
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Actual*
|
CER**
|
Growth
/ (decline)
|
(1)%
|
1%
|
3%
|
4%
|
(7)%
|
(3)%
|
13%
|
16%
|
|
Total***
|
Americas
|
EMEAA
|
G. China
|
Growth
/ (decline)
|
2%
|
4%
|
(2)%
|
32%
|
Exchange rates:
|
USD:GBP
|
USD:EUR
|
* US
dollar actual currency
|
H1 2019
|
0.77
|
0.89
|
**
Translated at constant H1 2018 exchange rates
|
H1 2018
|
0.73
|
0.83
|
***
After central overheads
|
|
|
|
**** At
CER and excluding: owned asset disposals, significant liquidated
damages, current year acquisitions, System Fund results and hotel
cost reimbursements
|
Appendix 7: Definitions
|
CER: constant exchange rates with H1 2018 exchange rates
applied to H1 2019.
Comparable RevPAR: revenue per available room for hotels
that have traded for all of 2018 and 2019, reported at
CER.
Fee revenue: group revenue from reportable segments
excluding owned, leased and managed lease hotels, and significant
liquidated damages.
Fee margin: adjusted to exclude owned, leased and managed
lease hotels, and significant liquidated damages.
Reportable segments: group results excluding System Fund
results, hotel cost reimbursements and exceptional
items.
Significant liquidated damages: $4m in H1 2019 ($4m EMEAA
fee business); $7m in H1 2018 ($3m in EMEAA fee business and $4m in
Greater China fee business).
Total gross revenue: total rooms revenue from franchised
hotels and total hotel revenue from managed, owned, leased and
managed lease hotels. Other than owned, leased and managed lease
hotels, it is not revenue attributable to IHG, as it is derived
mainly from hotels owned by third parties.
Total RevPAR: Revenue per available room including hotels
that have opened or exited in either 2018 or 2019, reported at
CER.
Underlying Interest: adds back interest relating to the
System Fund.
|
Appendix 8: Investor information for 2019 Interim
dividend
|
||||||||
Ex-dividend date:
|
29
August 2019
|
Record date:
|
30
August 2019
|
Payment date:
|
3
October 2019
|
|||
Dividend payment:
|
ADRs:
39.9 cents per ADR; the corresponding amount in Pence Sterling per
ordinary share will be announced on 18 September 2019, calculated
based on the average of the
market exchange rates for the three working days commencing 13
September. A DRIP is available, allowing shareholders of
ordinary shares to elect to reinvest their cash dividend by
purchasing additional ordinary shares.
|
|||||||
For further information, please contact:
|
|
|||||||
Investor
Relations (Heather Wood, Matthew Kay, Rakesh Patel):
|
+44
(0)1895 512 176
|
+44
(0)7527 419 431
|
|
|||||
Media
Relations (Yasmin Diamond; Mark Debenham):
|
+44
(0)1895 512 097
|
+44
(0)7527 424 046
|
|
|||||
|
|
|
|
|||||
Presentation for Analysts and Shareholders:
A
conference call and webcast presented by Keith Barr, Chief
Executive Officer and Paul Edgecliffe-Johnson, Chief Financial
Officer will commence at 9.30am on 6 August 2019 on the web address
www.ihgplc.com/interims2019.
For those wishing to ask questions please use the dial in details
below which will have a Q&A facility.
https://www.investis-live.com/ihg/5d24a3499add6d1100612f38/hyri
The
archived webcast of the presentation is expected to be on this
website later on the day of the results and will remain on it for
the foreseeable future.
|
|
There
will also be a live listen only dial-in facility, details are
below:
|
UK
|
+44 (0)
203 936 2999
|
US
|
+1 646
664 1960
|
All
other locations:
|
+44 (0)
203 936 2999
|
Participant
Access Code:
|
72 80
10
|
UK:
|
+44 (0)
203 936 3001
|
US:
|
+1 845
709 8569
|
All
other locations:
|
+44 (0)
203 936 3001
|
Replay
pin
|
41 17
72
|
Website:
The full release and supplementary data will be available on our
website from 7:00am (London time) on 6th August. The web address is www.ihgplc.com/interims2019.
|
Notes to Editors:
IHG®
(InterContinental
Hotels Group) [LON:IHG, NYSE:IHG (ADRs)]
is a global organisation with a broad portfolio of hotel brands,
including Six
Senses Hotels Resorts Spas, Regent Hotels & Resorts,
InterContinental®
Hotels & Resorts,
Kimpton®
Hotels & Restaurants,
Hotel Indigo®,
EVEN®
Hotels, HUALUXE®
Hotels and Resorts,
Crowne Plaza®
Hotels & Resorts,
voco™, Holiday Inn®,
Holiday Inn Express®,
Holiday Inn Club
Vacations®,
Holiday Inn Resort®,
avid™ hotels,
Staybridge Suites®,
Atwell
Suites™,and Candlewood Suites®.
IHG
franchises, leases, manages or owns more than 5,700 hotels and
nearly 856,000 guest rooms in more than 100 countries, with over
1,900 hotels in its development pipeline. IHG also manages
IHG®
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 400,000 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: https://twitter.com/ihgcorporate,
www.facebook.com/ihgcorporateand
www.linkedin.com/company/intercontinental-hotels-group.
|
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
|
|
2018
|
|
|
|
2019
|
Restated
|
%
|
|
|
$m
|
$m
|
change
|
|
Revenuea
|
|
|
|
|
|
|
|
|
|
Americas
|
520
|
514
|
1.2
|
|
EMEAA
|
338
|
233
|
45.1
|
|
Greater
China
|
66
|
69
|
(4.3)
|
|
Central
|
88
|
84
|
4.8
|
|
|
____
|
____
|
____
|
|
Revenue
from reportable segments
|
1,012
|
900
|
12.4
|
|
|
|
|
|
|
System
Fund revenues
|
675
|
618
|
9.2
|
|
Reimbursement
of costs
|
593
|
595
|
(0.3)
|
|
|
____
|
____
|
____
|
|
Total
revenue
|
2,280
|
2,113
|
7.9
|
|
|
____
|
____
|
____
|
|
Operating profita
|
|
|
|
|
|
|
|
|
|
Americas
|
344
|
334
|
3.0
|
|
EMEAA
|
88
|
95
|
(7.4)
|
|
Greater
China
|
36
|
32
|
12.5
|
|
Central
|
(58)
|
(48)
|
(20.8)
|
|
|
____
|
____
|
____
|
|
Operating
profit from reportable segments
|
410
|
413
|
(0.7)
|
|
System
Fund result
|
47
|
(12)
|
491.7
|
|
|
____
|
____
|
____
|
|
Operating
profit before exceptional items
|
457
|
401
|
14.0
|
|
Exceptional
items
|
(15)
|
(53)
|
71.7
|
|
|
____
|
____
|
____
|
|
Operating
profit
|
442
|
348
|
27.0
|
|
Net
financial expenses
|
(67)
|
(47)
|
(42.6)
|
|
|
____
|
____
|
____
|
|
Profit
before tax
|
375
|
301
|
24.6
|
|
|
____
|
____
|
____
|
|
|
|
|
|
|
Earnings
per ordinary share
|
|
|
|
|
|
Basic
|
167.2¢
|
122.6¢
|
36.4
|
|
Adjusted
|
143.2¢
|
145.3¢
|
(1.4)
|
|
|
|
|
|
Average US dollar to sterling exchange rate
|
$1 : £0.77
|
$1 :
£0.73
|
5.5
|
|
Hotels
|
Rooms
|
|||
Global hotel and room count
|
|
Change
over
|
|
Change
over
|
|
|
2019
30 June
|
2018
31
December
|
2019
30 June
|
2018
31
December
|
|
Analysed
by brand
|
|
|
|
|
|
|
Six
Senses
|
18
|
18
|
1,448
|
1,448
|
|
Regent
|
6
|
-
|
2,003
|
(2)
|
|
InterContinental
|
205
|
1
|
69,436
|
155
|
|
Kimpton
|
69
|
3
|
13,470
|
555
|
|
HUALUXE
|
9
|
1
|
2,632
|
297
|
|
Crowne
Plaza
|
426
|
(3)
|
119,494
|
(674)
|
|
voco
|
5
|
3
|
1,252
|
721
|
|
Hotel
Indigo
|
109
|
7
|
13,310
|
561
|
|
EVEN
Hotels
|
10
|
-
|
1,551
|
-
|
|
Holiday
Inn1
|
1,269
|
18
|
236,507
|
2,655
|
|
Holiday
Inn Express
|
2,776
|
50
|
286,486
|
6,970
|
|
avid
hotels
|
3
|
2
|
261
|
174
|
|
Staybridge
Suites
|
292
|
16
|
31,816
|
1,599
|
|
Candlewood
Suites
|
401
|
5
|
37,578
|
368
|
|
Other
|
125
|
(1)
|
38,671
|
4,547
|
|
|
____
|
____
|
______
|
_____
|
Total
|
5,723
|
120
|
855,915
|
19,374
|
|
|
|
____
|
____
|
______
|
_____
|
Analysed
by ownership type
|
|
|
|
|
|
|
Franchised
|
4,715
|
100
|
594,165
|
17,186
|
|
Managed
|
982
|
17
|
255,413
|
1,847
|
|
Owned,
leased and managed lease
|
26
|
3
|
6,337
|
341
|
|
|
____
|
____
|
______
|
_____
|
Total
|
5,723
|
120
|
855,915
|
19,374
|
|
|
|
____
|
____
|
______
|
_____
|
|
Hotels
|
Rooms
|
|||||
Global pipeline
|
|
Change
over
|
|
Change
over
|
|||
|
|
2019
30 June
|
2018
31
December
|
2019
30 June
|
2018
31
December
|
||
Analysed
by brand
|
|
|
|
|
|
||
|
Six
Senses
|
19
|
19
|
1,466
|
1,466
|
||
|
Regent
|
5
|
2
|
944
|
430
|
||
|
InterContinental
|
61
|
1
|
15,976
|
181
|
||
|
Kimpton
|
30
|
3
|
5,294
|
820
|
||
|
HUALUXE
|
21
|
-
|
6,051
|
(48)
|
||
|
Crowne
Plaza
|
89
|
10
|
25,225
|
3,091
|
||
|
voco
|
10
|
2
|
1,898
|
388
|
||
|
Hotel
Indigo
|
103
|
11
|
15,268
|
2,190
|
||
|
EVEN
Hotels
|
23
|
5
|
4,112
|
928
|
||
|
Holiday
Inn1
|
282
|
(6)
|
55,378
|
(273)
|
||
|
Holiday
Inn Express
|
790
|
6
|
99,452
|
1,028
|
||
|
avid
hotels
|
195
|
24
|
18,049
|
2,238
|
||
|
Staybridge
Suites
|
185
|
3
|
21,239
|
390
|
||
|
Candlewood
Suites
|
94
|
(8)
|
8,457
|
(664)
|
||
|
Other
|
18
|
(6)
|
3,036
|
(1,268)
|
||
|
|
____
|
____
|
______
|
_____
|
||
Total
|
1,925
|
66
|
281,845
|
10,897
|
|||
|
|
____
|
____
|
______
|
_____
|
||
Analysed
by ownership type
|
|
|
|
|
|||
|
Franchised
|
1,417
|
19
|
165,440
|
4,097
|
||
|
Managed
|
507
|
47
|
116,250
|
6,800
|
||
|
Owned,
leased and managed lease
|
1
|
-
|
155
|
-
|
||
|
|
____
|
____
|
______
|
_____
|
||
Total
|
1,925
|
66
|
281,845
|
10,897
|
|||
|
|
____
|
____
|
______
|
_____
|
|
6 months ended 30 June
|
||||
Americas Results
|
|
2018
|
|
||
|
2019
|
Restated
|
%
|
||
|
$m
|
$m
|
change
|
||
Revenue from the reportable segmenta
|
|
|
|
||
|
Fee
business
|
418
|
413
|
1.2
|
|
|
Owned,
leased and managed lease
|
102
|
101
|
1.0
|
|
|
____
|
____
|
____
|
||
Total
|
|
520
|
514
|
1.2
|
|
|
____
|
____
|
____
|
||
Operating profit from the reportable segmenta
|
|
|
|
||
|
Fee
business
|
323
|
312
|
3.5
|
|
|
Owned,
leased and managed lease
|
21
|
22
|
(4.5)
|
|
|
____
|
____
|
____
|
||
|
|
344
|
334
|
3.0
|
|
Exceptional
items
|
|
(2)
|
(15)
|
86.7
|
|
|
____
|
____
|
____
|
||
Operating
profit
|
342
|
319
|
7.2
|
||
|
____
|
____
|
____
|
||
|
|
|
|
Americas Comparable RevPAR movement on previous year
|
6 months ended
30 June 2019
|
|
Fee
business
|
|
|
|
InterContinental
|
1.8%
|
|
Kimpton
|
3.8%
|
|
Crowne
Plaza
|
(1.3)%
|
|
Hotel
Indigo
|
1.5%
|
|
EVEN
Hotels
|
(2.2)%
|
|
Holiday
Inn
|
(0.9)%
|
|
Holiday
Inn Express
|
0.1%
|
|
Staybridge
Suites
|
0.6%
|
|
Candlewood
Suites
|
(1.1)%
|
|
All
brands
|
0.0%
|
|
|
|
Owned,
leased and managed lease
|
|
|
|
InterContinental
|
8.3%
|
|
EVEN
Hotels
|
0.1%
|
|
Holiday
Inn
|
5.6%
|
|
All
brands
|
5.6%
|
Americas hotel and room count
|
|
Hotels
|
|
Rooms
|
|
|
2019
30 June
|
Change
over 2018
31
December
|
2019
30 June
|
Change
over 2018
31
December
|
|
Analysed
by brand
|
|
|
|
|
|
|
InterContinental
|
51
|
-
|
17,893
|
140
|
|
Kimpton
|
64
|
-
|
12,421
|
114
|
|
Crowne
Plaza
|
151
|
(5)
|
40,456
|
(1,043)
|
|
Hotel
Indigo
|
60
|
3
|
7,786
|
291
|
|
EVEN
Hotels
|
10
|
-
|
1,551
|
-
|
|
Holiday
Inn1
|
782
|
8
|
134,949
|
457
|
|
Holiday
Inn Express
|
2,312
|
23
|
209,223
|
2,603
|
|
avid
hotels
|
3
|
2
|
261
|
174
|
|
Staybridge
Suites
|
275
|
14
|
29,427
|
1,395
|
|
Candlewood
Suites
|
401
|
5
|
37,578
|
368
|
|
Other
|
102
|
-
|
23,164
|
81
|
|
____
|
____
|
______
|
_____
|
|
Total
|
4,211
|
50
|
514,709
|
4,580
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
Franchised
|
3,909
|
56
|
455,159
|
5,057
|
|
Managed
|
295
|
(6)
|
57,327
|
(477)
|
|
Owned,
leased and managed lease
|
7
|
-
|
2,223
|
-
|
|
____
|
____
|
______
|
_____
|
|
Total
|
4,211
|
50
|
514,709
|
4,580
|
|
|
____
|
____
|
______
|
_____
|
|
Hotels
|
Rooms
|
|||
Americas pipeline
|
|
Change
over
|
|
Change
over
|
|
|
2019
30 June
|
2018
31
December
|
2019
30 June
|
2018
31
December
|
|
Analysed
by brand
|
|
|
|
|
|
|
Six
Senses
|
5
|
5
|
462
|
462
|
|
InterContinental
|
5
|
(1)
|
1,158
|
(319)
|
|
Kimpton
|
18
|
2
|
2,557
|
222
|
|
Crowne
Plaza
|
5
|
(1)
|
1,113
|
(150)
|
|
Hotel
Indigo
|
38
|
3
|
5,248
|
725
|
|
EVEN
Hotels
|
11
|
1
|
1,441
|
145
|
|
Holiday
Inn1
|
106
|
(20)
|
13,593
|
(2,459)
|
|
Holiday
Inn Express
|
485
|
(14)
|
46,412
|
(1,208)
|
|
avid
hotels
|
194
|
23
|
17,834
|
2,023
|
|
Staybridge
Suites
|
166
|
3
|
17,221
|
319
|
|
Candlewood
Suites
|
94
|
(8)
|
8,457
|
(664)
|
|
Other
|
18
|
(4)
|
3,034
|
(848)
|
|
____
|
____
|
______
|
_____
|
|
Total
|
1,145
|
(11)
|
118,530
|
(1,752)
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
Franchised
|
1,099
|
(16)
|
111,663
|
(1,994)
|
|
Managed
|
46
|
5
|
6,867
|
242
|
|
____
|
____
|
______
|
_____
|
|
Total
|
1,145
|
(11)
|
118,530
|
(1,752)
|
|
|
____
|
____
|
______
|
_____
|
|
6 months ended 30 June
|
||||
|
|
||||
EMEAA results
|
|
2018
|
|
||
|
2019
|
Restated
|
%
|
||
|
$m
|
$m
|
change
|
||
Revenue from the reportable segmenta
|
|
|
|
||
|
Fee
business
|
158
|
153
|
3.3
|
|
|
Owned,
leased and managed lease
|
180
|
80
|
125.0
|
|
|
____
|
____
|
____
|
||
Total
|
|
338
|
233
|
45.1
|
|
|
____
|
____
|
____
|
||
Operating profit from the reportable segmenta
|
|
|
|
||
|
Fee
business
|
93
|
95
|
(2.1)
|
|
|
Owned,
leased and managed lease
|
(5)
|
-
|
-
|
|
|
____
|
____
|
____
|
||
|
|
88
|
95
|
(7.4)
|
|
Exceptional
items
|
|
(2)
|
(5)
|
60.0
|
|
|
|
____
|
____
|
____
|
|
Operating
profit
|
86
|
90
|
(4.4)
|
||
|
____
|
____
|
____
|
||
|
|
|
|
EMEAA comparable RevPAR movement on previous year
|
6
months ended
30
June 2019
|
|||
|
|
|||
Fee
business
|
|
|||
|
InterContinental
|
1.1%
|
||
|
Crowne
Plaza
|
(1.1)%
|
||
|
Hotel
Indigo
|
1.9%
|
||
|
Holiday
Inn
|
(0.8)%
|
||
|
Holiday
Inn Express
|
2.3%
|
||
|
Staybridge
Suites
|
1.8%
|
||
|
All
brands
|
0.2%
|
||
|
|
|
||
Owned,
leased and managed lease
|
|
|||
|
InterContinental
|
1.2%
|
||
|
Holiday
Inn
|
2.4%
|
||
|
All
brands
|
1.4%
|
|
Hotels
|
Rooms
|
|||
EMEAA hotel and room count
|
|
Change
over
|
|
Change
over
|
|
|
2019
30 June
|
2018
31
December
|
2019
30 June
|
2018
31
December
|
|
Analysed
by brand
|
|
|
|
|
|
|
Six
Senses
|
17
|
17
|
1,326
|
1,326
|
|
Regent
|
3
|
-
|
771
|
2
|
|
InterContinental
|
108
|
2
|
32,657
|
358
|
|
Kimpton
|
4
|
2
|
920
|
312
|
|
Crowne
Plaza
|
182
|
-
|
46,001
|
(258)
|
|
voco
|
5
|
3
|
1,252
|
721
|
|
Hotel
Indigo
|
39
|
4
|
4,019
|
271
|
|
Holiday
Inn1
|
388
|
3
|
72,054
|
701
|
|
Holiday
Inn Express
|
313
|
9
|
44,778
|
1,046
|
|
Staybridge
Suites
|
17
|
2
|
2,389
|
204
|
|
Other
|
14
|
(3)
|
8,851
|
(764)
|
|
____
|
____
|
______
|
_____
|
|
Total
|
1,090
|
39
|
215,018
|
3,919
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
Franchised
|
747
|
21
|
120,993
|
2,871
|
|
Managed
|
324
|
15
|
89,911
|
707
|
|
Owned,
leased and managed lease
|
19
|
3
|
4,114
|
341
|
|
____
|
____
|
______
|
_____
|
|
Total
|
1,090
|
39
|
215,018
|
3,919
|
|
|
____
|
____
|
______
|
_____
|
|
Hotels
|
Rooms
|
|||
EMEAA pipeline
|
|
Change
over
|
|
Change
over
|
|
|
2019
30 June
|
2018
31
December
|
2019
30 June
|
2018
31
December
|
|
Analysed
by brand
|
|
|
|
|
|
|
Six
Senses
|
12
|
12
|
875
|
875
|
|
Regent
|
4
|
1
|
664
|
150
|
|
InterContinental
|
30
|
1
|
7,130
|
211
|
|
Kimpton
|
7
|
-
|
1,240
|
-
|
|
Crowne
Plaza
|
37
|
3
|
9,824
|
808
|
|
voco
|
10
|
2
|
1,898
|
388
|
|
Hotel
Indigo
|
42
|
2
|
6,247
|
486
|
|
EVEN
Hotels
|
1
|
-
|
200
|
-
|
|
Holiday
Inn1
|
118
|
12
|
26,548
|
2,209
|
|
Holiday
Inn Express
|
112
|
(2)
|
19,156
|
2
|
|
avid
hotels
|
1
|
1
|
215
|
215
|
|
Staybridge
Suites
|
19
|
-
|
4,018
|
71
|
|
Other
|
-
|
(1)
|
2
|
(141)
|
|
____
|
____
|
______
|
_____
|
|
Total
|
393
|
31
|
78,017
|
5,274
|
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
|
|
Franchised
|
164
|
5
|
27,122
|
1,441
|
|
Managed
|
228
|
26
|
50,740
|
3,833
|
Owned,
leased and managed lease
|
1
|
-
|
155
|
-
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
393
|
31
|
78,017
|
5,274
|
|
|
____
|
____
|
______
|
_____
|
|
6
months ended 30 June
|
|||||
Greater China results
|
|
2018
|
|
|||
|
2019
|
Restated
|
%
|
|||
|
$m
|
$m
|
change
|
|||
Revenue from the reportable segmenta
|
|
|
|
|||
|
Fee
business
|
66
|
69
|
(4.3)
|
||
|
|
____
|
____
|
____
|
||
Total
|
|
66
|
69
|
(4.3)
|
||
|
____
|
____
|
____
|
|||
Operating profit from the reportable segmenta
|
|
|
|
|||
|
Fee
business
|
36
|
32
|
12.5
|
||
|
|
____
|
____
|
____
|
||
|
|
36
|
32
|
12.5
|
||
Exceptional
items
|
|
-
|
-
|
-
|
||
|
____
|
____
|
____
|
|||
|
36
|
32
|
12.5
|
|||
Operating
profit
|
____
|
____
|
____
|
Greater China comparable RevPAR movement on previous
year
|
6 months ended
30 June 2019
|
|
|
|
|
Fee
business
|
|
|
|
InterContinental
|
1.4%
|
|
HUALUXE
|
6.5%
|
|
Crowne
Plaza
|
(2.2)%
|
|
Hotel
Indigo
|
(2.6)%
|
|
Holiday
Inn
|
(0.5)%
|
|
Holiday
Inn Express
|
0.5%
|
|
All
brands
|
(0.3)%
|
|
Hotels
|
Rooms
|
|
|||
Greater China hotel and room count
|
2019
|
Change
over
2018
|
2019
|
Change
over
2018
|
||
|
30 June
|
31
December
|
30 June
|
31
December
|
||
Analysed
by brand
|
|
|
|
|
||
|
Six
Senses
|
1
|
1
|
122
|
122
|
|
|
Regent
|
3
|
-
|
1,232
|
(4)
|
|
|
InterContinental
|
46
|
(1)
|
18,886
|
(343)
|
|
|
Kimpton
|
1
|
1
|
129
|
129
|
|
|
HUALUXE
|
9
|
1
|
2,632
|
297
|
|
|
Crowne
Plaza
|
93
|
2
|
33,037
|
627
|
|
|
Hotel
Indigo
|
10
|
-
|
1,505
|
(1)
|
|
|
Holiday
Inn1
|
99
|
7
|
29,504
|
1,497
|
|
|
Holiday
Inn Express
|
151
|
18
|
32,485
|
3,321
|
|
|
Other
|
9
|
2
|
6,656
|
5,230
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
422
|
31
|
126,188
|
10,875
|
||
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
||
|
Franchised
|
59
|
23
|
18,013
|
9,258
|
|
|
Managed
|
363
|
8
|
108,175
|
1,617
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
422
|
31
|
126,188
|
10,875
|
||
|
|
____
|
____
|
______
|
_____
|
|
Hotels
|
Rooms
|
|
|||
Greater China pipeline
|
2019
|
Change
over
2018
|
2019
|
Change
over
2018
|
||
|
30 June
|
31
December
|
30 June
|
31
December
|
||
Analysed
by brand
|
|
|
|
|
||
|
Six
Senses
|
2
|
2
|
129
|
129
|
|
|
Regent
|
1
|
1
|
280
|
280
|
|
|
InterContinental
|
26
|
1
|
7,688
|
289
|
|
|
Kimpton
|
5
|
1
|
1,497
|
598
|
|
|
HUALUXE
|
21
|
-
|
6,051
|
(48)
|
|
|
Crowne
Plaza
|
47
|
8
|
14,288
|
2,433
|
|
|
Hotel
Indigo
|
23
|
6
|
3,773
|
979
|
|
|
EVEN
Hotels
|
11
|
4
|
2,471
|
783
|
|
|
Holiday
Inn1
|
58
|
2
|
15,237
|
(23)
|
|
|
Holiday
Inn Express
|
193
|
22
|
33,884
|
2,234
|
|
|
Other
|
-
|
(1)
|
-
|
(279)
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
387
|
46
|
85,298
|
7,375
|
||
|
|
____
|
____
|
______
|
_____
|
|
Analysed
by ownership type
|
|
|
|
|
||
|
Franchised
|
154
|
30
|
26,655
|
4,650
|
|
|
Managed
|
233
|
16
|
58,643
|
2,725
|
|
|
|
____
|
____
|
______
|
_____
|
|
Total
|
387
|
46
|
85,298
|
7,375
|
||
|
|
____
|
____
|
______
|
_____
|
|
6 months ended 30 June
|
|||
|
|
2018
|
|
|
|
2019
|
Restated
|
%
|
|
Central results
|
$m
|
$m
|
change
|
|
|
|
|
|
|
Revenue
|
88
|
84
|
4.8
|
|
Gross
costs
|
(146)
|
(132)
|
(10.6)
|
|
|
____
|
____
|
____
|
|
|
|
(58)
|
(48)
|
(20.8)
|
Exceptional
items
|
|
(11)
|
(33)
|
66.7
|
|
|
____
|
____
|
____
|
Operating
loss
|
(69)
|
(81)
|
14.8
|
|
|
____
|
____
|
____
|
|
Revenue
|
Operating
profit
|
|||||
|
|
|
|
|
2018
|
|
|
|
2019
|
2018
|
%
|
2019
|
Restated
|
%
|
|
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
|
|
Per
Group income statement
|
2,280
|
2,113
|
7.9
|
442
|
348
|
27.0
|
|
Significant
liquidated damages
|
(4)
|
(7)
|
42.9
|
(4)
|
(7)
|
42.9
|
|
Exceptional
items
Acquisitions
of businesses
|
-
(22)
|
-
-
|
-
-
|
15
2
|
53
-
|
(71.7)
-
|
|
System
Fund
|
(675)
|
(618)
|
(9.2)
|
(47)
|
12
|
(491.7)
|
|
Reimbursement
of costs
|
(593)
|
(595)
|
0.3
|
-
|
-
|
-
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
Underlying
at actual exchange rates
|
986
|
893
|
10.4
|
408
|
406
|
0.5
|
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
At
actual exchange rates
|
At
constant currency
|
||||
|
2019
|
2018
|
%
|
2019
|
2018
|
%
|
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
Underlying revenue
|
|
|
|
|
|
|
Americas
|
520
|
514
|
1.2
|
522
|
514
|
1.6
|
EMEAA
|
312
|
230
|
35.7
|
329
|
230
|
43.0
|
Greater
China
|
66
|
65
|
1.5
|
70
|
65
|
7.7
|
Central
|
88
|
84
|
4.8
|
90
|
84
|
7.1
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
Underlying
Group revenue
|
986
|
893
|
10.4
|
1,011
|
893
|
13.2
|
Owned,
leased and managed lease revenue included above
|
(267)
|
(181)
|
(47.5)
|
(277)
|
(181)
|
(53.0)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
Underlying
Group fee revenue
|
719
|
712
|
1.0
|
734
|
712
|
3.1
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
|
|
|
|
|
|
At
actual exchange rates
|
At
constant currency
|
||||
|
|
2018
|
|
|
2018
|
|
|
2019
|
Restated
|
%
|
2019
|
Restated
|
%
|
|
$m
|
$m
|
change
|
$m
|
$m
|
change
|
|
|
|
|
|
|
|
Underlying operating profit
|
|
|
|
|
|
|
Americas
|
344
|
334
|
3.0
|
346
|
334
|
3.6
|
EMEAA
|
86
|
92
|
(6.5)
|
90
|
92
|
(2.2)
|
Greater
China
|
36
|
28
|
28.6
|
37
|
28
|
32.1
|
Central
|
(58)
|
(48)
|
(20.8)
|
(59)
|
(48)
|
(22.9)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
Underlying
Group operating profit
|
408
|
406
|
0.5
|
414
|
406
|
2.0
|
Owned,
leased and managed lease operating profit included
above
|
(17)
|
(22)
|
22.7
|
(16)
|
(22)
|
27.3
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
Underlying
Group fee profit
|
391
|
384
|
1.8
|
398
|
384
|
3.6
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
Group
fee margin
|
54.4%
|
53.9%
|
0.5ppts
|
54.2%
|
53.9%
|
0.3ppts
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
|
|
|
6 months ended 30 June
|
|
|
|
2018
|
|
2019
|
Restated
|
|
$m
|
$m
|
|
|
|
Basic earnings per ordinary share
|
|
|
|
|
|
Profit
available for equity holders
|
306
|
233
|
Basic
weighted average number of ordinary shares (millions)
|
183
|
190
|
|
|
|
Basic
earnings per ordinary share (cents)
|
167.2
|
122.6
|
|
_____
|
_____
|
Underlying earnings per ordinary share
|
|
|
Profit
available for equity holders
|
306
|
233
|
Adjusted
for:
|
|
|
Significant
liquidated damages
|
(4)
|
(7)
|
Tax on
significant liquidated damages
|
1
|
2
|
System
Fund revenue and expenses
|
(47)
|
12
|
Interest
attributable to the System Fund
|
(9)
|
(9)
|
Exceptional items
before tax
|
15
|
53
|
Tax on
exceptional items
Acquisition of
businesses after tax
|
(3)
2
|
(13)
-
|
Currency
effect
|
6
|
-
|
|
_____
|
_____
|
Underlying
profit available for equity holders
|
267
|
271
|
|
_____
|
_____
|
|
|
|
Underlying
earnings per ordinary share (cents)
|
145.8
|
142.6
|
|
_____
|
_____
|
|
6
months ended 30 June
|
|
|
|
2018
|
|
2019
|
Restated
|
|
$m
|
$m
|
|
|
|
Net cash from investing activities
|
(378)
|
(105)
|
Adjusted
for:
|
|
|
Contract
acquisition costs
|
(17)
|
(25)
|
System
Fund depreciation and amortisation
Acquisition of
businesses, net of cash acquired
|
25
299
|
18
-
|
|
_____
|
_____
|
Net
capital expenditure
|
(71)
|
(112)
|
|
|
|
Add
back:
Disposal
receipts
|
(5)
|
(2)
|
System
Fund depreciation and amortisation
|
(25)
|
(18)
|
|
_____
|
_____
|
Gross
capital expenditure
|
(101)
|
(132)
|
|
_____
|
_____
|
Analysed
as:
|
|
|
Capital
expenditure: maintenance and key money
|
(45)
|
(50)
|
Capital
expenditure: recyclable investments
|
(14)
|
(32)
|
Capital
expenditure: System Fund investments
|
(42)
|
(50)
|
|
_____
|
_____
|
Gross
capital expenditure
|
(101)
|
(132)
|
|
_____
|
_____
|
|
|
|
|
|
|
|
6 months ended 30 June
|
|
|
|
2018
|
|
2019
|
Restated
|
|
$m
|
$m
|
|
|
|
Net cash from operating activities
|
194
|
306
|
|
|
|
Adjusted
for:
|
|
|
Contract
acquisition costs
|
17
|
25
|
|
|
|
Less:
|
|
|
Purchase
of shares by employee share trusts
|
(3)
|
(3)
|
Capital
expenditure: maintenance and key money
Lease
repayments
|
(45)
(22)
|
(50)
(17)
|
|
_____
|
_____
|
Free
cash flow
|
141
|
261
|
|
_____
|
_____
|
|
6 months ended 30 June
|
|
|
|
|
|
2018
|
|
|
2019
|
Restated
|
|
$m
|
$m
|
Net financial expenses
|
|
|
|
|
|
Financial
income
|
3
|
2
|
Financial
expenses
|
(70)
|
(49)
|
|
_____
|
_____
|
Net
financial expenses
|
(67)
|
(47)
|
Adjusted
for:
|
|
|
Interest payable on
balances with the System Fund
|
(7)
|
(6)
|
Capitalised
interest relating to System Fund assets
|
(2)
|
(3)
|
|
_____
|
_____
|
Underlying
interest
|
(76)
|
(56)
|
|
_____
|
_____
|
|
2019
6
months ended
30
June
$m
|
2018
6
months ended
30
June Restated*
$m
|
|
Continuing operations
|
|
|
|
|
|
|
|
Revenue
from fee business
|
730
|
719
|
|
Revenue
from owned, leased and managed
lease
hotels
|
282
|
181
|
|
System
Fund revenues
|
675
|
618
|
|
Reimbursement
of costs
|
593
|
595
|
|
|
____
|
____
|
|
Total revenue (notes 4 and 5)
|
2,280
|
2,113
|
|
|
|
|
|
Cost of
sales
|
(391)
|
(298)
|
|
System
Fund expenses
|
(628)
|
(630)
|
|
Reimbursed
costs
|
(593)
|
(595)
|
|
Administrative
expenses before exceptional items
|
(160)
|
(138)
|
|
Share
of losses of associates and joint ventures
|
-
|
(3)
|
|
Other
operating income
|
5
|
7
|
|
Depreciation
and amortisation
|
(56)
|
(55)
|
|
|
____
|
____
|
|
Operating
profit before exceptional items (note 4)
|
457
|
401
|
|
|
|
|
|
Exceptional
items (note 6)
|
(15)
|
(53)
|
|
|
_____
|
_____
|
|
Operating profit (note 4)
|
442
|
348
|
|
Financial
income
|
3
|
2
|
|
Financial
expenses
|
(70)
|
(49)
|
|
|
_____
|
_____
|
|
Profit before tax
|
375
|
301
|
|
|
|
|
|
Tax
(note 7)
|
(69)
|
(68)
|
|
|
_____
|
_____
|
|
Profit for the period from continuing operations
|
306
|
233
|
|
|
_____
|
_____
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
Equity
holders of the parent
|
306
|
233
|
|
Non-controlling
interest
|
-
|
-
|
|
|
_____
|
_____
|
|
|
306
|
233
|
|
_____
|
_____
|
|
|
|
|
|
Earnings per ordinary share (note 8)
|
|
|
|
Continuing
and total operations:
|
|
|
|
|
Basic
|
167.2¢
|
122.6¢
|
|
Diluted
|
166.3¢
|
122.0¢
|
|
Adjusted
|
143.2¢
|
145.3¢
|
|
Adjusted
diluted
|
142.4¢
|
144.5¢
|
|
_____
|
_____
|
|
|
|
|
|
*
Restated for the adoption of IFRS 16 (see note 2).
|
|
|
|
2019
6 months ended
30 June
$m
|
2018
6 months ended
30 June
Restated*
$m
|
|
|
|
|
|
Profit for the period
|
306
|
233
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
Items
that may be subsequently reclassified to profit or
loss:
|
|
|
|
|
Gains
on cash flow hedges, net of related tax charge of $2m (2018
$nil)
|
4
|
-
|
|
Costs
of hedging
|
(2)
|
-
|
|
Hedging
losses reclassified to financial expenses
|
4
|
-
|
|
Exchange
gains on retranslation of foreign operations, including related tax
credit of $1m (2018 $1m)
|
25
|
19
|
|
_____
|
_____
|
|
|
31
|
19
|
|
Items
that will not be reclassified to profit or loss:
|
|
|
|
|
Gains/(losses)
on equity instruments classified as fair value through other
comprehensive income
|
6
|
(7)
|
|
Re-measurement
(losses)/gains on defined benefit plans, net of related tax credit
of $2m (2018 charge of $2m)
|
(6)
|
7
|
|
_____
|
_____
|
|
Total other comprehensive income for the period
|
31
|
19
|
|
|
_____
|
_____
|
|
Total comprehensive income for the period
|
337
|
252
|
|
|
_____
|
_____
|
|
Attributable
to:
|
|
|
|
|
Equity
holders of the parent
|
337
|
251
|
|
Non-controlling
interest
|
-
|
1
|
|
_____
|
_____
|
|
|
337
|
252
|
|
|
_____
|
_____
|
*
Restated for the adoption of IFRS 16 (see note 2).
|
|
|
|
6 months ended 30 June 2019
|
||||
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
At
beginning of the period (as previously reported)
|
146
|
(2,397)
|
1,166
|
8
|
(1,077)
|
Impact
of adopting IFRS 16 (note 2)
|
-
|
1
|
(55)
|
-
|
(54)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
At
beginning of the period (restated)
|
146
|
(2,396)
|
1,111
|
8
|
(1,131)
|
|
|
|
|
|
|
Total
comprehensive income for the period
|
-
|
37
|
300
|
-
|
337
|
Transfer
of treasury shares to employee share trusts
|
-
|
(19)
|
19
|
-
|
-
|
Purchase
of own shares by employee share trusts
|
-
|
(3)
|
-
|
-
|
(3)
|
Release
of own shares by employee share trusts
|
-
|
23
|
(23)
|
-
|
-
|
Equity-settled
share-based cost
|
-
|
-
|
20
|
-
|
20
|
Tax
related to share schemes
|
-
|
-
|
3
|
-
|
3
|
Equity
dividends paid
|
-
|
-
|
(649)
|
-
|
(649)
|
Transaction
costs relating to shareholder returns
|
-
|
-
|
(1)
|
-
|
(1)
|
Exchange
adjustments
|
(1)
|
1
|
-
|
-
|
-
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
At end of the period
|
145
|
(2,357)
|
780
|
8
|
(1,424)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
6 months ended 30 June 2018
|
||||
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
At
beginning of the period (as previously reported)
|
154
|
(2,431)
|
969
|
7
|
(1,301)
|
Impact
of adopting IFRS 16 (note 2)
|
-
|
-
|
(53)
|
-
|
(53)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
At
beginning of period (restated)
|
154
|
(2,431)
|
916
|
7
|
(1,354)
|
|
|
|
|
|
|
Total
comprehensive income for the period
|
-
|
11
|
240
|
1
|
252
|
Transfer
of treasury shares to employee share trusts
|
-
|
(17)
|
17
|
-
|
-
|
Purchase
of own shares by employee share trusts
|
-
|
(3)
|
-
|
-
|
(3)
|
Release
of own shares by employee share trusts
|
-
|
24
|
(24)
|
-
|
-
|
Equity-settled
share-based cost
|
-
|
-
|
19
|
-
|
19
|
Tax
related to share schemes
|
-
|
-
|
2
|
-
|
2
|
Equity
dividends paid
|
-
|
-
|
(130)
|
(1)
|
(131)
|
Exchange
adjustments
|
(4)
|
4
|
-
|
-
|
-
|
|
_____
|
______
|
_____
|
_____
|
_____
|
At end of the period
|
150
|
(2,412)
|
1,040
|
7
|
(1,215)
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
*
|
Other
reserves comprise the capital redemption reserve, shares held by
employee share trusts, other reserves, fair value reserve, cash
flow hedging reserve and currency translation reserve.
|
All
items above are shown net of tax.
|
|
2019
30 June
|
2018
31 December
Restated*
|
|
$m
|
$m
|
ASSETS
|
|
|
Property,
plant and equipment
|
284
|
273
|
Right-of-use
assets
|
540
|
513
|
Goodwill
and other intangible assets
|
1,461
|
1,143
|
Investment
in associates and joint ventures
|
105
|
104
|
Other
financial assets
|
268
|
260
|
Derivative
financial instruments
|
16
|
7
|
Tax
receivable
|
40
|
31
|
Deferred
tax assets
|
65
|
63
|
Contract
costs
|
60
|
55
|
Contract
assets
|
274
|
270
|
|
_______
|
_______
|
Total non-current assets
|
3,113
|
2,719
|
|
_______
|
_______
|
Inventories
|
6
|
5
|
Trade
and other receivables
|
772
|
610
|
Tax
receivable
|
33
|
27
|
Other
financial assets
|
4
|
1
|
Derivative
financial instruments
|
-
|
1
|
Cash
and cash equivalents
|
188
|
704
|
Contract
costs
|
5
|
5
|
Contract
assets
|
21
|
20
|
|
_______
|
_______
|
Total current assets
|
1,029
|
1,373
|
|
_______
|
_____
|
Total assets (note 4)
|
4,142
|
4,092
|
|
______
|
______
|
LIABILITIES
|
|
|
Loans
and other borrowings
|
(58)
|
(104)
|
Lease
liabilities
|
(63)
|
(55)
|
Trade
and other payables
|
(494)
|
(616)
|
Deferred
revenue
|
(607)
|
(572)
|
Provisions
|
(11)
|
(10)
|
Tax
payable
|
(51)
|
(50)
|
|
______
|
______
|
Total current liabilities
|
(1,284)
|
(1,407)
|
|
______
|
______
|
Loans
and other borrowings
|
(2,295)
|
(1,910)
|
Lease
liabilities
|
(634)
|
(615)
|
Retirement
benefit obligations
|
(98)
|
(91)
|
Trade
and other payables
|
(148)
|
(125)
|
Deferred
revenue
|
(949)
|
(934)
|
Provisions
|
(18)
|
(17)
|
Deferred
tax liabilities
|
(140)
|
(124)
|
|
______
|
_______
|
Total non-current liabilities
|
(4,282)
|
(3,816)
|
|
______
|
_______
|
Total liabilities
|
(5,566)
|
(5,223)
|
|
______
|
_______
|
Net liabilities
|
(1,424)
|
(1,131)
|
|
______
|
_______
|
EQUITY
|
|
|
Equity
share capital
|
145
|
146
|
Capital
redemption reserve
|
10
|
10
|
Shares
held by employee share trusts
|
(3)
|
(4)
|
Other
reserves
|
(2,864)
|
(2,865)
|
Fair
value reserve
|
53
|
47
|
Cash
flow hedging reserve
|
2
|
(4)
|
Currency
translation reserve
|
445
|
420
|
Retained
earnings
|
780
|
1,111
|
|
______
|
_______
|
IHG shareholders’ equity
|
(1,432)
|
(1,139)
|
Non-controlling
interest
|
8
|
8
|
|
_______
|
_______
|
Total equity
|
(1,424)
|
(1,131)
|
|
______
|
______
|
*
Restated for the adoption of IFRS 16 (see note 2).
|
|
|
|
2019
6 months ended
30 June
|
2018
6 months ended
30 June
Restated*
|
|
|
$m
|
$m
|
|
|
|
|
|
Profit for the period
|
306
|
233
|
|
Adjustments
reconciling profit for the period to cash flow from operations
before contract acquisition costs (note 11)
|
3
|
123
|
|
|
_____
|
_____
|
|
Cash
flow from operations before contract acquisition costs
|
309
|
356
|
|
Contract
acquisition costs
|
(17)
|
(25)
|
|
|
_____
|
_____
|
|
Cash flow from operations
|
292
|
331
|
|
Interest
paid
|
(33)
|
(21)
|
|
Interest
received
|
2
|
1
|
|
Tax
paid on operating activities
|
(67)
|
(5)
|
|
|
_____
|
_____
|
|
Net cash from operating activities
|
194
|
306
|
|
|
_____
|
_____
|
|
Cash flow from investing activities
|
|
|
|
Purchase
of property, plant and equipment
|
(31)
|
(16)
|
|
Purchase
of intangible assets
|
(46)
|
(56)
|
|
Investment
in associates and joint ventures
|
-
|
(1)
|
|
Investment
in other financial assets
|
(5)
|
(31)
|
|
Acquisition
of businesses, net of cash acquired (note 10)
|
(299)
|
-
|
|
Capitalised
interest paid
|
(2)
|
(3)
|
|
Repayments
of other financial assets
|
5
|
2
|
|
|
_____
|
_____
|
|
Net cash from investing activities
|
(378)
|
(105)
|
|
|
_____
|
_____
|
|
Cash flow from financing activities
|
|
|
|
Purchase
of own shares by employee share trusts
|
(3)
|
(3)
|
|
Dividends
paid to shareholders
|
(649)
|
(130)
|
|
Dividends
paid to non-controlling interest
|
-
|
(1)
|
|
Transaction
costs relating to shareholder returns
|
(1)
|
-
|
|
Lease
repayments
|
(22)
|
(17)
|
|
Increase
in other borrowings
|
376
|
65
|
|
|
_____
|
_____
|
|
Net cash from financing activities
|
(299)
|
(86)
|
|
|
_____
|
_____
|
|
Net movement in cash and cash equivalents, net of overdrafts, in
the period
|
(483)
|
115
|
|
|
|
|
|
Cash
and cash equivalents, net of overdrafts, at beginning of the
period
|
600
|
58
|
|
Exchange
rate effects
|
13
|
(13)
|
|
|
_____
|
_____
|
|
Cash and cash equivalents, net of overdrafts, at end of the
period
|
130
|
160
|
|
|
_____
|
_____
|
|
|
|
1.
|
Basis of preparation
|
|
These condensed interim financial statements have been prepared in
accordance with the Disclosure Guidance and Transparency Rules of
the United Kingdom’s Financial Conduct Authority and IAS 34
‘Interim Financial Reporting’. Other than the changes
described in note 2 below, they have been prepared on a consistent
basis using the same accounting policies and methods of computation
set out in the InterContinental Hotels Group PLC (the Group or IHG)
Annual Report and Form 20-F for the year ended 31 December
2018.
The Directors are satisfied that the Group has sufficient resources
to continue in operation for the foreseeable future, being a period
of not less than 12 months from the date of this report.
Accordingly, the condensed interim financial statements have been
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.
Other
than line items which have been restated for IFRS 16, financial
information for the year ended 31 December 2018 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.
|
Adoption of new accounting standards
|
|
IFRS 16 ‘Leases’
|
|
IFRS
16 supersedes IAS 17 and sets out the principles for the
recognition, measurement, presentation and disclosure of leases and
requires lessees to account for most leases under a single
on-balance sheet model. The Group has a number of material property
and equipment leases.
The
Group has adopted IFRS 16 using the full retrospective method of
adoption with the date of initial application being 1 January 2019.
The Group elected to use the transition practical expedient
allowing the standard to be applied only to contracts that were
previously identified as leases applying IAS 17 at the date of
initial application. The Group also elected to use the recognition
exemptions for lease contracts that, at the commencement date, have
a lease term of 12 months or less and do not contain a purchase
option (‘short-term leases’), lease contracts for which
the underlying asset is of low value (‘low-value
assets’), and leases of intangible assets.
|
|
Before
the adoption of IFRS 16, the Group classified each of its leases at
the inception date as either a finance lease or an operating lease.
A lease was classified as a finance lease if it transferred
substantially all of the risks and rewards incidental to ownership
of the leased asset to the Group; otherwise it was classified as an
operating lease. Finance leases were capitalised at the
commencement of the lease at the inception date fair value of the
leased asset or, if lower, at the present value of the minimum
lease payments. Lease payments were apportioned between interest
(recognised as finance cost) and reduction of the lease liability.
In an operating lease, the leased asset was not capitalised, and
the lease payments were recognised as rent expense in the statement
of profit or loss on a straight-line basis over the lease term. Any
prepaid rent and accrued rent were recognised under Prepayments and
Trade and other payables, respectively.
Under
IFRS 16, the Group recognises right-of-use assets at the
commencement date of the lease (i.e. the date the underlying asset
is available for use). Right-of-use assets are measured at cost,
less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made
at or before the commencement date, less any lease incentives
received. Unless the Group is reasonably certain to obtain
ownership of the leased assets at the end of the lease term, the
recognised right-of-use assets are depreciated over the shorter of
its estimated useful life and lease term. Right-of-use assets are
subject to impairment testing.
|
|
At
the commencement date of the lease, the Group recognises lease
liabilities measured at the present value of lease payments to be
made over the lease term. The lease payments include fixed payments
(including in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a
rate, and amounts expected to be paid under residual value
guarantees. Variable lease payments that do not depend on an index
or a rate are recognised as expense in the period over which the
event or condition that triggers the payment occurs.
The
leases acquired with the UK portfolio acquisition (see note 10)
include variable lease payments where rentals are linked to the
performance of the hotels by way of reductions in rentals in the
event that lower than target cash flows are generated by the
hotels. In the event that rent reductions are not applicable, the
Group’s exposure to this type of rental payment in excess of
amounts reflected in the measurement of lease liabilities is
£46m per annum over the remaining lease term of 25 years.
Additional rentals, which are uncapped, are also payable and are
calculated as a percentage of the profit earned by the
hotels.
|
|
In
calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date if the
interest rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for
lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in
the lease term, a change in the in-substance fixed lease payment or
a change in the assessment regarding the purchase of the underlying
asset.
The
Group applies the short-term lease recognition exemption to its
short-term leases of equipment (i.e., those leases that have a
lease term of 12 months or less from the commencement date and do
not contain a purchase option). It also applies the lease of
low-value assets recognition exemption to leases that are
considered of low value. Lease payments on short-term leases and
leases of low-value assets are recognised as expense on a
straight-line basis over the lease term.
Lessor
accounting under IFRS 16 is substantially unchanged from IAS 17.
The Group is not party to any material leases where it acts as a
lessor.
In
accordance with the full retrospective method of adoption, the
Group applied IFRS 16 at the date of initial application as if it
had already been effective at the commencement date of existing
lease contracts. Accordingly, the comparative information in these
interim condensed consolidated financial statements has been
restated, as summarised and set out below.
|
|
For
the six months ended 30 June 2018:
|
|
● Depreciation
expense increased by $17m relating to the depreciation of new
right-of-use assets recognised.
● Rent
expense decreased by $24m relating to previous operating
leases.
● Finance
costs increased by $9m relating to the interest expense on
additional lease liabilities recognised.
● Income
tax expenses decreased by $1m relating to the tax effect of these
changes.
● Net
cash inflows from operating activities increased by $20m and cash
outflows from investing and financing activities increased by the
same amount, representing the fixed lease payments of the
recognised lease liabilities.
|
|
As
at 31 December 2018:
|
|
● Right-of-use
assets of $513m were recognised and presented separately in the
statement of financial position. This includes $174m relating to
leased assets previously recognised under finance leases included
within property, plant and equipment.
● Lease
liabilities of $670m were recognised and presented separately in
the statement of financial position. Finance lease liabilities of
$235m previously included in loans and other borrowings are now
included in lease liabilities.
● Prepayments
of $3m and trade and other payables of $35m related to leases
previously classed as operating leases were
derecognised.
● Net
deferred tax liabilities decreased by $10m because of the deferred
tax impact of the changes in assets and liabilities.
● The
net effect of these adjustments increased the Group’s net
liabilities by $54m.
|
|
|
|
As
reported
|
IFRS 16 adoption
|
As
restated
|
|
$m
|
$m
|
$m
|
|
|
|
|
Total revenue
|
2,113
|
-
|
2,113
|
|
|
|
|
Cost
of sales
|
(305)
|
7
|
(298)
|
System
Fund expenses
|
(630)
|
-
|
(630)
|
Reimbursed
costs
|
(595)
|
-
|
(595)
|
Administrative
expenses
|
(155)
|
17
|
(138)
|
Share
of losses of associates and joint ventures
|
(3)
|
-
|
(3)
|
Other
operating income
|
7
|
-
|
7
|
Depreciation
and amortisation
|
(38)
|
(17)
|
(55)
|
|
_____
|
_____
|
_____
|
Operating
profit before exceptional items
|
394
|
7
|
401
|
Exceptional
items
|
(53)
|
-
|
(53)
|
|
_____
|
_____
|
_____
|
Operating profit
|
341
|
7
|
348
|
Financial
income
|
2
|
-
|
2
|
Financial
expenses
|
(40)
|
(9)
|
(49)
|
Tax
|
(69)
|
1
|
(68)
|
|
_____
|
_____
|
_____
|
Profit after tax
|
234
|
(1)
|
233
|
|
____
|
____
|
____
|
|
As
reported
$m
|
IFRS 16 adoption
$m
|
As
restated
$m
|
|
|
|
|
Profit for the period
|
234
|
(1)
|
233
|
Exchange
gains on retranslation of foreign operations, including related tax
credit of $1m
|
18
|
1
|
19
|
Losses
on equity instruments classified as fair value through other
comprehensive income, net of related tax of $nil
|
(7)
|
-
|
(7)
|
Re-measurement
gains on defined benefit plans, net of related tax charge of
$2m
|
7
|
-
|
7
|
|
____
|
____
|
____
|
Total comprehensive income for the period
|
252
|
-
|
252
|
|
____
|
____
|
____
|
|
As
reported
$m
|
IFRS 16 adoption $m
|
As
restated
$m
|
|
|
|
|
Property,
plant and equipment
|
447
|
(174)
|
273
|
Right-of-use
assets
|
-
|
513
|
513
|
Deferred
tax assets
|
60
|
3
|
63
|
Other
non-current assets
|
1,870
|
-
|
1,870
|
|
_______
|
_______
|
_______
|
Total non-current assets
|
2,377
|
342
|
2,719
|
|
_______
|
_______
|
_______
|
Trade
and other receivables
|
613
|
(3)
|
610
|
Other
current assets
|
763
|
-
|
763
|
|
_______
|
_______
|
_______
|
Total current assets
|
1,376
|
(3)
|
1,373
|
|
_______
|
_______
|
_______
|
Total assets
|
3,753
|
339
|
4,092
|
|
_______
|
_______
|
_______
|
Loans
and other borrowings
|
(120)
|
16
|
(104)
|
Lease
liabilities
|
-
|
(55)
|
(55)
|
Trade
and other payables
|
(618)
|
2
|
(616)
|
Other
current liabilities
|
(632)
|
-
|
(632)
|
|
_______
|
_______
|
_______
|
Total current liabilities
|
(1,370)
|
(37)
|
(1,407)
|
|
_______
|
_______
|
_______
|
Loans
and other borrowings
|
(2,129)
|
219
|
(1,910)
|
Lease
liabilities
|
-
|
(615)
|
(615)
|
Trade
and other payables
|
(158)
|
33
|
(125)
|
Deferred
tax liabilities
|
(131)
|
7
|
(124)
|
Other
non-current liabilities
|
(1,042)
|
-
|
(1,042)
|
|
_______
|
_______
|
_______
|
Total non-current liabilities
|
(3,460)
|
(356)
|
(3,816)
|
|
_______
|
_______
|
_______
|
Total liabilities
|
(4,830)
|
(393)
|
(5,223)
|
|
_______
|
_______
|
_______
|
Net liabilities
|
(1,077)
|
(54)
|
(1,131)
|
|
_______
|
_______
|
_______
|
Equity
share capital
|
146
|
-
|
146
|
Capital
redemption reserve
|
10
|
-
|
10
|
Shares
held by employee share trusts
|
(4)
|
-
|
(4)
|
Other
reserves
|
(2,865)
|
-
|
(2,865)
|
Fair
value reserve
|
47
|
-
|
47
|
Cash
flow hedging reserve
|
(4)
|
-
|
(4)
|
Currency
translation reserve
|
419
|
1
|
420
|
Retained
earnings
|
1,166
|
(55)
|
1,111
|
|
_______
|
_______
|
________
|
IHG shareholders’ equity
|
(1,085)
|
(54)
|
(1,139)
|
|
|
|
|
Non-controlling
interest
|
8
|
-
|
8
|
|
_______
|
_______
|
________
|
Total equity
|
(1,077)
|
(54)
|
(1,131)
|
|
________
|
_______
|
________
|
|
|
|
|
|
As
reported
$m
|
IFRS 16 adoption
$m
|
As
restated
$m
|
|
|
|
|
Profit for the period
|
234
|
(1)
|
233
|
Adjustments
reconciling profit for the period to cash flow from operations
before contract acquisition costs
|
93
|
30
|
123
|
|
_____
|
_____
|
_____
|
Cash
flow from operations before contract acquisition costs
|
327
|
29
|
356
|
Contract
acquisition costs
|
(25)
|
-
|
(25)
|
|
_____
|
_____
|
_____
|
Cash flow from operations
|
302
|
29
|
331
|
Interest
paid
|
(12)
|
(9)
|
(21)
|
Interest
received
|
1
|
-
|
1
|
Tax
paid on operating activities
|
(5)
|
-
|
(5)
|
|
_____
|
_____
|
_____
|
Net cash from operating activities
|
286
|
20
|
306
|
|
_____
|
_____
|
_____
|
|
|
|
|
Landlord
contributions to property, plant and equipment
|
3
|
(3)
|
-
|
Other
cash flows from investing activities
|
(105)
|
-
|
(105)
|
|
_____
|
_____
|
_____
|
Net cash from investing activities
|
(102)
|
(3)
|
(105)
|
|
_____
|
_____
|
_____
|
|
|
|
|
Lease
repayments
|
-
|
(17)
|
(17)
|
Other
cash flows from financing activities
|
(69)
|
-
|
(69)
|
|
_____
|
_____
|
_____
|
Net cash from financing activities
|
(69)
|
(17)
|
(86)
|
|
_____
|
_____
|
_____
|
|
|
|
|
Net movement in cash and cash equivalents, net of overdrafts, in
the period
|
115
|
-
|
115
|
|
|
|
|
Cash
and cash equivalents, net of overdrafts, at beginning of the
period
|
58
|
-
|
58
|
Exchange
rate effects
|
(13)
|
-
|
(13)
|
|
_____
|
_____
|
_____
|
Cash and cash equivalents, net of overdrafts, at end of the
period
|
160
|
-
|
160
|
|
_____
|
_____
|
_____
|
|
As
reported
cents
|
IFRS 16 adoption
cents
|
As
restated
cents
|
|
|
|
|
Basic
earnings per ordinary share
|
123.2
|
(0.6)
|
122.6
|
Diluted
earnings per ordinary share
|
122.5
|
(0.5)
|
122.0
|
|
Other
Standards and Interpretations
With
effect from 1 January 2019, the Group has also adopted the
following amendments and interpretations, none of which has had a
material impact on the consolidated financial statements of the
Group.
● Amendments to IFRS
9: Prepayment Features with
Negative Compensation
● Amendments to IAS
19: Plan Amendment, Curtailment or
Settlement
● Amendments to IAS
28: Long-term interest in
associates and joint ventures
● IFRIC 23
Uncertainty over Income Tax
Treatment
● Annual improvements
2015-2017 cycle
|
3.
|
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 = £0.77 (2018 $1 = £0.73). In
the case of the euro, the translation rate is $1 = €0.89
(2018 $1 = €0.83).
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 = £0.79 (30 June 2018 $1 =
£0.76; 31 December 2018 $1 = £0.78). In the case of the
euro, the translation rate is $1 = €0.88 (30 June 2018 $1 =
€0.86; 31 December 2018 $1 = €0.87).
|
|
Revenue
|
2019
6 months ended
30 June
|
2018
6 months ended
30 June
|
|
|
$m
|
$m
|
|
|
|
|
|
Americas
|
520
|
514
|
|
EMEAA
|
338
|
233
|
|
Greater
China
|
66
|
69
|
|
Central
|
88
|
84
|
|
|
_____
|
_____
|
|
Revenue
from reportable segments
|
1,012
|
900
|
|
System
Fund revenues
|
675
|
618
|
|
Reimbursement
of costs
|
593
|
595
|
|
|
_____
|
_____
|
|
Total revenue
|
2,280
|
2,113
|
|
|
_____
|
_____
|
|
|
|
Profit
|
2019
6 months ended
30 June
$m
|
2018
6 months ended
30 June
Restated
$m
|
|
|
|
|
|
Americas
|
344
|
334
|
|
EMEAA
|
88
|
95
|
|
Greater
China
|
36
|
32
|
|
Central
|
(58)
|
(48)
|
|
|
_____
|
_____
|
|
Operating
profit from reportable segments
|
410
|
413
|
|
System
Fund
|
47
|
(12)
|
|
|
____
|
____
|
|
Operating
profit before exceptional items
|
457
|
401
|
|
Exceptional
items (note 6)
|
(15)
|
(53)
|
|
|
_____
|
_____
|
|
Operating profit
|
442
|
348
|
|
Net
finance costs
|
(67)
|
(47)
|
|
|
_____
|
_____
|
|
Profit before tax
|
375
|
301
|
|
|
_____
|
_____
|
|
All
results relate to continuing operations.
|
|
Assets
|
2019
30 June
$m
|
2018
31 December
Restated
$m
|
|
|
|
|
|
Americas
|
1,844
|
1,656
|
|
EMEAA
|
1,055
|
738
|
|
Greater
China
|
145
|
110
|
|
Central
|
756
|
755
|
|
|
_____
|
_____
|
|
Segment assets
|
3,800
|
3,259
|
|
|
|
|
|
Unallocated
assets:
|
|
|
|
Derivative
financial instruments
|
16
|
8
|
|
Tax
receivable
|
73
|
58
|
|
Deferred
tax assets
|
65
|
63
|
|
Cash
and cash equivalents
|
188
|
704
|
|
|
_____
|
_____
|
|
Total assets
|
4,142
|
4,092
|
|
|
_____
|
_____
|
6 months ended 30 June 2019
|
|
|
|
|
|
|
Americas
$m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Total
$m
|
|
|
|
|
|
|
Franchise
and base management fees
|
411
|
117
|
42
|
-
|
570
|
Incentive
management fees
|
7
|
41
|
24
|
-
|
72
|
Central
revenues
|
-
|
-
|
-
|
88
|
88
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
Revenue
from fee business
|
418
|
158
|
66
|
88
|
730
|
Revenue
from owned, leased and managed lease hotels
|
102
|
180
|
-
|
-
|
282
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
520
|
338
|
66
|
88
|
1,012
|
|
_____
|
_____
|
_____
|
_____
|
|
System
Fund revenues
|
|
|
|
|
675
|
Reimbursement
of costs
|
|
|
|
|
593
|
|
|
|
|
|
_____
|
Total revenue
|
|
|
|
|
2,280
|
|
|
|
|
|
_____
|
6 months ended 30 June 2018
|
|
|
|
|
|
|
Americas
$m
|
EMEAA
$m
|
Greater China
$m
|
Central
$m
|
Total
$m
|
|
|
|
|
|
|
Franchise
and base management fees
|
405
|
110
|
46
|
-
|
561
|
Incentive
management fees
|
8
|
43
|
23
|
-
|
74
|
Central
revenues
|
-
|
-
|
-
|
84
|
84
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
Revenue
from fee business
|
413
|
153
|
69
|
84
|
719
|
Revenue
from owned, leased and managed lease hotels
|
101
|
80
|
-
|
-
|
181
|
|
_____
|
_____
|
_____
|
_____
|
_____
|
|
514
|
233
|
69
|
84
|
900
|
|
_____
|
_____
|
_____
|
_____
|
|
System
Fund revenues
|
|
|
|
|
618
|
Reimbursement
of costs
|
|
|
|
|
595
|
|
|
|
|
|
_____
|
Total revenue
|
|
|
|
|
2,113
|
|
|
|
|
|
_____
|
6.
|
Exceptional items
|
|||||
|
|
2019
6 months ended
30 June
$m
|
2018
6 months ended
30 June
$m
|
|
||
|
Exceptional items before tax
|
|
|
|
||
|
|
Administrative
expenses:
|
|
|
|
|
|
|
Reorganisation
costs (a)
|
(10)
|
(32)
|
|
|
|
|
Acquisition
and integration costs (b)
|
(5)
|
(6)
|
|
|
|
|
Pension
settlement cost (c)
|
-
|
(15)
|
|
|
|
|
|
_____
|
_____
|
|
|
|
|
(15)
|
(53)
|
|
||
|
|
_____
|
_____
|
|
||
|
Tax
|
|
|
|
||
|
|
Tax on
exceptional items (d)
|
3
|
13
|
|
|
|
|
_____
|
_____
|
|
|
All
items above relate to continuing operations. These items are
treated as exceptional by reason of their size or
nature.
|
|
|
a)
|
In
September 2017, the Group launched a comprehensive efficiency
programme which will fund a series of new strategic initiatives to
drive an acceleration in IHG’s future growth. The programme
is centred around strengthening the Group’s organisational
structure to redeploy resources to leverage scale in the highest
opportunity markets and segments. The programme is expected to be
completed in 2019. The cost includes consultancy fees of $5m (2018
$15m) and severance costs of $3m (2018 $11m). An additional $13m
(2018 $30m) has been charged to the System Fund.
|
|
b)
|
In
2019, primarily relates to the acquisition of Six Senses (see note
10) and, in 2018, related to the acquisitions of Regent and the UK
portfolio.
|
|
c)
|
Arose
from the termination of the US funded Inter-Continental Hotels
Pension Plan which involved certain qualifying members receiving
lump-sum cash-out payments with the remaining pension obligations
subject to a buy-out by an insurance provider through the purchase
of a group annuity contract.
|
|
d)
|
Relates
to tax impacts on the above items.
|
|
|
|
7.
|
Tax
|
|
The tax
charge on profit for the period from continuing operations,
excluding the impact of the System Fund and exceptional items (see
note 6), has been calculated using an interim effective tax rate of
21% (2018 22%) analysed as follows:
|
|
|
2019
|
2019
|
2019
|
2018
Restated
|
2018
Restated
|
2018
Restated
|
|
|||
|
6 months ended 30 June
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
Before
exceptional items and
System
Fund
|
343
|
(72)
|
21%
|
366
|
(81)
|
22%
|
|
|||
|
System
Fund
|
47
|
-
|
|
(12)
|
-
|
|
|
|||
|
Exceptional
items (note 6)
|
(15)
|
3
|
|
(53)
|
13
|
|
|
|||
|
|
_____
|
_____
|
|
_____
|
_____
|
|
|
|||
|
|
375
|
(69)
|
|
301
|
(68)
|
|
|
|||
|
|
_____
|
_____
|
|
_____
|
_____
|
|
|
|||
|
Analysed
as:
|
|
|
|
|
|
|
|
|||
|
|
UK
tax
|
|
(10)
|
|
|
(6)
|
|
|
||
|
|
Foreign
tax
|
|
(59)
|
|
|
(62)
|
|
|
||
|
|
|
_____
|
|
|
_____
|
|
|
|||
|
|
|
(69)
|
|
|
(68)
|
|
|
|||
|
|
|
_____
|
|
|
_____
|
|
|
|||
|
|
|
8.
|
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 exercise 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.
Additionally, earnings attributable to the System Fund are excluded
from the calculation of adjusted earnings per ordinary share, as
IHG has an agreement with the IHG Owners Association to spend Fund
income for the benefit of hotels in the IHG System such that the
Group does not make a gain or loss from operating the
Fund.
IHG
also records an interest charge on the outstanding cash balance
relating to the IHG Rewards Club programme. These interest payments
are recognised as interest income for the Fund and interest expense
for IHG. The Fund also benefits from the capitalisation of interest
related to the development of the next-generation Guest Reservation
System. As the Fund is included on the Group income statement,
these amounts are included in the reported Group net financial
expenses. Given that all results related to the Fund are
excluded from the calculation of adjusted earnings per ordinary
share, these interest amounts are deducted from profit available
for equity holders.
* See
the Use of Non-GAAP measures section in the Interim Management
Report.
|
|
Continuing and total operations
|
2019
6 months ended
30 June
|
2018
6
months ended
30 June
Restated
|
|
|
|
|
|
|
|
Basic earnings per ordinary share
|
|
|
|
|
Profit
available for equity holders ($m)
|
306
|
233
|
|
|
Basic
weighted average number of ordinary shares (millions)
|
183
|
190
|
|
|
Basic
earnings per ordinary share (cents)
|
167.2
|
122.6
|
|
|
|
_____
|
_____
|
|
|
Diluted earnings per ordinary share
|
|
|
|
|
Profit
available for equity holders ($m)
|
306
|
233
|
|
|
Diluted
weighted average number of ordinary shares (millions)
|
184
|
191
|
|
|
Diluted
earnings per ordinary share (cents)
|
166.3
|
122.0
|
|
|
|
_____
|
_____
|
|
|
Adjusted earnings per ordinary share
|
|
|
|
|
Profit
available for equity holders ($m)
|
306
|
233
|
|
|
Adjusting
items ($m):
|
|
|
|
|
|
System
Fund revenues and expenses
|
(47)
|
12
|
|
|
Interest
attributable to the System Fund
|
(9)
|
(9)
|
|
|
Exceptional
items before tax (note 6)
|
15
|
53
|
|
|
Tax on
exceptional items (note 6)
|
(3)
|
(13)
|
|
|
_____
|
_____
|
|
|
Adjusted
earnings ($m)
|
262
|
276
|
|
|
Basic
weighted average number of ordinary shares (millions)
|
183
|
190
|
|
|
Adjusted
earnings per ordinary share (cents)
|
143.2
|
145.3
|
|
|
|
_____
|
_____
|
|
|
Diluted
weighted average number of ordinary shares (millions)
|
184
|
191
|
|
|
Adjusted
diluted earnings per ordinary share (cents)
|
142.4
|
144.5
|
|
|
|
_____
|
_____
|
|
The
diluted weighted average number of ordinary shares is calculated
as:
|
||
|
|
2019
millions
|
2018
millions
|
|
Basic
weighted average number of ordinary shares
|
183
|
190
|
|
Dilutive
potential ordinary shares
|
1
|
1
|
|
|
_____
|
_____
|
|
|
184
|
191
|
|
|
_____
|
_____
|
9.
|
Dividends and shareholder returns
|
|||||
|
|
2019
cents per share
|
2018
cents per share
|
2019
$m
|
2018
$m
|
|
|
Paid
during the period:
|
|
|
|
|
|
|
|
Final
(declared for previous year)
|
78.1
|
71.0
|
139
|
130
|
|
|
Special
|
262.1
|
-
|
510
|
-
|
|
|
|
_____
|
_____
|
_____
|
_____
|
|
|
|
340.2
|
71.0
|
649
|
130
|
|
|
|
______
|
______
|
______
|
______
|
|
Proposed
for the period:
|
|
|
|
|
|
|
|
Interim
|
39.9
|
36.3
|
73
|
69*
|
|
|
______
|
______
|
______
|
______
|
|
|
*
Amount paid.
|
|
|
|
|
|
|
In
October 2018, the Group announced a $500m return of funds to
shareholders by way of a special dividend and share consolidation.
On 11 January 2019, shareholders approved the share consolidation
on the basis of 19 new ordinary shares of 20 340/399p per share for
every 20 existing ordinary shares of 19 17/21p, which became
effective on 14 January 2019 and resulted in the consolidation of
10m shares. The dividend was paid on 29 January 2019. The dividend
and share consolidation had the same economic effect as a share
repurchase at fair value, therefore previously reported earnings
per share has not been restated.
The
total number of shares held as treasury shares at 30 June 2019 was
5.7m.
|
10.
|
Acquisition of businesses
Six Senses
On 12
February 2019, the Group completed the acquisition of Six Senses
Hotels Resorts Spas (Six Senses). Six Senses is a leading operator
of top tier luxury hotels, resorts and spas with a world-renowned
reputation for wellness and sustainability. Six Senses will sit at
the top of IHG’s luxury portfolio.
Six Senses contributed revenue of $15m and an operating loss of $1m
for the period between the date of acquisition and the balance
sheet date. The results of Six Senses are included in the EMEAA and
Greater China business segments. If the acquisition had taken place
at 1 January 2019, there would have been no material difference to
reported Group revenue and operating profit for the six months
ended 30 June 2019.
The
provisional fair values of the identifiable assets and liabilities
acquired, and the purchase consideration, are as
follows:
|
|
|
$m
|
|
Identifiable
intangible assets:
|
|
|
Brands
|
189
|
|
Management
contracts
|
54
|
|
Right-of-use
assets
|
19
|
|
Other
non-current assets
|
8
|
|
Trade
and other receivables
|
12
|
|
Cash
and cash equivalents
|
7
|
|
Other
current assets
|
1
|
|
Trade
and other payables
|
(14)
|
|
Lease
liabilities
|
(19)
|
|
Other
liabilities
|
(2)
|
|
Deferred
tax liability
|
(3)
|
|
|
_____
|
|
Net identifiable assets acquired
|
252
|
|
Goodwill
|
52
|
|
|
_____
|
|
Total purchase consideration
|
304
|
|
|
_____
|
|
Comprising:
|
|
|
Cash
paid on acquisition, including working capital
settlement
|
299
|
|
Contingent
consideration *
|
5
|
|
|
_____
|
|
|
304
|
|
|
_____
|
|
|
|
* Payable upon
certain conditions being met relating to a pipeline property. The
range of possible outcomes is nil to $5m.
|
The
goodwill is attributable to the global growth opportunities
identified for the acquired business. The amount of goodwill that
is expected to be deductible for income tax purposes is
$50m.
At
the date of acquisition, the fair value of trade receivables was
$8m, with a corresponding carrying value of $10m. The difference
between the fair value and the carrying amount reflects the
expected credit loss.
No
contingent liabilities were recognised as a result of the
acquisition.
|
If new
information obtained within one year of the date of acquisition
about the facts and circumstances that existed at the date of
acquisition identifies adjustments to the fair value amounts, then
the accounting for the acquisition will be revised.
|
UK
portfolio – acquisition of additional hotels
On 14
February 2019, following on from the UK portfolio deal completed in
2018 to operate 10 UK hotels under long-term leases from Covivio,
the Group added a further two hotels to the portfolio bringing the
total hotels in the UK portfolio to 12 at 30 June
2019.
The
total consideration for the period was $11m, comprising purchase
consideration of $1m and contingent consideration of $10m relating
to the two additional hotels.
The
contingent consideration comprises the present value of the
above-market element of the expected lease payments over the 25
year lives of the hotel lease agreements. The undiscounted amount
is $38m. The value of the contingent consideration has been
assessed with the assistance of professional third-party advisors
and is subject to periodic re-assessment as interest rates and
expected lease payments change. The above-market assessment has
been determined by comparing the expected lease payments as a
percentage of forecast hotel operating profit (before depreciation
and rent) with market metrics, on a lease by lease basis. There is
no floor to the amount payable and no maximum amount.
The two
additional hotels contributed revenue of $7m and an operating loss
of $1m for the period between the date of acquisition and the
balance sheet date. The results of the hotels are included in the
EMEAA business segment If the acquisition had taken place at 1
January 2019, there would have been no material difference to
reported Group revenue and operating profit for the six months
ended 30 June 2019.
Assets
acquired primarily comprise goodwill of $12m, of which nil is
expected to be deductible for tax purposes. The goodwill is
attributable to the trading potential of the acquired hotel
operations and growth opportunities.
|
|
UK
portfolio – finalisation of 2018 purchase price
allocation
The
goodwill recognised on the 10 hotels acquired in 2018 was $48m at
acquisition. This has subsequently increased by $4m relating to the
finalisation of provisional fair values assigned to working capital
balances.
|
|
|
$m
|
Cash
flows relating to acquisitions:
|
|
Cash
paid on acquisition, including working capital
settlement
|
299
|
Contingent
consideration paid
|
4
|
Settlement of stamp
duty liability
|
3
|
Less:
cash and cash equivalents acquired
|
(7)
|
|
_____
|
|
299
|
|
_____
|
|
|
|
2019
6
months ended
30
June
|
2018
6 months ended
30 June
Restated
|
|
|
$m
|
$m
|
|
|
|
|
|
Profit
for the period
|
306
|
233
|
|
Adjustments
for:
|
|
|
|
|
Net
financial expenses
|
67
|
47
|
|
Income
tax charge
|
69
|
68
|
|
Depreciation and
amortisation
|
56
|
55
|
|
System
Fund depreciation and amortisation
|
25
|
18
|
|
Exceptional items
(including System Fund)
|
28
|
83
|
|
Equity-settled
share-based cost
|
20
|
19
|
|
Dividends from
associates and joint ventures
|
1
|
2
|
|
Increase in
deferred revenue
|
47
|
100
|
|
Increase in
contract costs
|
(5)
|
-
|
|
Retirement benefit
contributions, net of costs
|
(1)
|
(12)
|
|
Utilisation of
provisions, net of charge
|
2
|
-
|
|
Other
changes in net working capital
|
(286)
|
(214)
|
|
Cash
flows relating to exceptional items
|
(30)
|
(55)
|
|
Contract assets
deduction in revenue
|
10
|
9
|
|
Other
items
|
-
|
3
|
|
|
_____
|
_____
|
Total
adjustments
|
3
|
123
|
|
|
_____
|
_____
|
|
Cash
flow from operations before contract acquisition costs
|
309
|
356
|
|
|
_____
|
_____
|
12.
|
Net debt
|
|
|
2019
30 June
|
2018
31 December
Restated
|
|
|
$m
|
$m
|
|
|
|
|
|
Cash
and cash equivalents
|
188
|
704
|
|
Loans
and other borrowings – current
|
(58)
|
(104)
|
|
Loans
and other borrowings – non-current
|
(2,295)
|
(1,910)
|
|
Lease
liabilities – current
|
(63)
|
(55)
|
|
Lease
liabilities – non-current
|
(634)
|
(615)
|
|
Derivatives
hedging debt values
|
15
|
15
|
|
|
_____
|
_____
|
|
Net debt*
|
(2,847)
|
(1,965)
|
|
|
_____
|
_____
|
|
* See
the Use of Non-GAAP measures section in the Interim Management
Report.
|
13.
|
Movement in net debt
|
|||
|
|
2019
6 months
ended
30 June
|
2018
6 months ended
30 June
Restated
|
|
|
|
$m
|
$m
|
|
|
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents, net of
overdrafts
|
(483)
|
115
|
|
|
Add
back cash flows in respect of other components of net
debt:
|
|
|
|
|
|
Lease
repayments
|
22
|
17
|
|
|
Increase
in other borrowings*
|
(376)
|
(65)
|
|
|
_____
|
_____
|
|
|
(Increase)/decrease
in net debt arising from cash flows
|
(837)
|
67
|
|
|
|
|
|
|
|
Non-cash
movements:
|
|
|
|
|
|
Lease
obligations
|
(32)
|
(16)
|
|
|
Increase
in accrued interest
|
(22)
|
(23)
|
|
|
Acquisitions
|
(19)
|
-
|
|
|
Exchange
and other adjustments
|
28
|
27
|
|
|
_____
|
_____
|
|
|
(Increase)/decrease in net debt
|
(882)
|
55
|
|
|
|
|
|
|
|
Net
debt at beginning of the period
|
(1,965)
|
(2,253)
|
|
|
|
_____
|
_____
|
|
|
Net debt at end of the period
|
(2,847)
|
(2,198)
|
|
|
|
_____
|
_____
|
14.
|
Fair values
|
||||
|
The
table below compares carrying amounts and fair values of the
Group’s financial assets and liabilities at 30 June
2019:
|
||||
|
|
2019
30 June
Carrying value
$m
|
2019
30 June
Fair value
$m
|
2018
31 December
Carrying value
$m
|
2018
31 December
Fair value
$m
|
|
Financial assets
|
|
|
|
|
|
Financial
assets measured at fair value:
|
|
|
|
|
|
Equity
securities
|
125
|
125
|
116
|
116
|
|
Derivatives
|
16
|
16
|
8
|
8
|
|
Financial
assets measured at amortised cost:
|
|
|
|
|
|
Other
financial assets
|
147
|
147
|
145
|
145
|
|
|
_____
|
_____
|
_____
|
_____
|
|
|
288
|
288
|
269
|
269
|
|
|
_____
|
_____
|
_____
|
_____
|
|
Financial liabilities
|
|
|
|
|
|
Financial
liabilities measured at fair value:
|
|
|
|
|
|
Deferred and
contingent purchase consideration
|
(151)
|
(151)
|
(131)
|
(131)
|
|
Financial
liabilities measured at amortised cost:
|
|
|
|
|
|
£400m 3.875%
bonds 2022
|
(516)
|
(547)
|
(509)
|
(543)
|
|
£300m 3.75%
bonds 2025
|
(390)
|
(414)
|
(385)
|
(399)
|
|
£350m 2.125%
bonds 2026
|
(449)
|
(440)
|
(447)
|
(417)
|
|
€500m 2.125%
bonds 2027
|
(566)
|
(608)
|
(569)
|
(566)
|
|
|
_____
|
_____
|
_____
|
_____
|
|
|
(2,072)
|
(2,160)
|
(2,041)
|
(2,056)
|
|
|
_____
|
_____
|
_____
|
_____
|
|
Cash
and cash equivalents, trade and other receivables, bank borrowings,
trade and other payables and provisions are excluded from the above
tables as their fair value approximates book value. The fair value
of financial assets measured at amortised cost approximates book
value based on prevailing market rates. The fair value of the
£400m, £300m, £350m and €500m bonds is based
on their quoted market price.
Financial
assets and liabilities measured at fair value through other
comprehensive income are held in the Group statement of financial
position at fair value as set out in the following
table.
|
||||
|
|
||||
|
30 June 2019
|
Level 1
$m
|
Level 2
$m
|
Level 3
$m
|
Total
$m
|
|
Assets
|
|
|
|
|
|
Equity
securities measured at fair value:
|
|
|
|
|
|
Quoted
equity shares
|
9
|
-
|
-
|
9
|
|
Unquoted equity
shares
|
-
|
-
|
116
|
116
|
|
Derivatives
|
-
|
16
|
-
|
16
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Deferred
and contingent purchase consideration
|
-
|
-
|
(151)
|
(151)
|
|
31 December 2018
|
Level 1
$m
|
Level 2
$m
|
Level 3
$m
|
Total
$m
|
|
Assets
|
|
|
|
|
|
Equity
securities measured at fair value:
|
|
|
|
|
|
Quoted
equity shares
|
8
|
-
|
-
|
8
|
|
Unquoted equity
shares
|
-
|
-
|
108
|
108
|
|
Derivatives
|
-
|
8
|
-
|
8
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Deferred
and contingent purchase consideration
|
-
|
-
|
(131)
|
(131)
|
|
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.
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.
|
||||
|
Derivatives
are fair valued using discounted future cash flows, taking into
consideration exchange rates prevailing on the last day of the
reporting period and interest rates from observable swap curves.
Currency swaps are measured at the present value of future cash
flows estimated and discounted back based on quoted forward
exchange rates and the applicable yield curves derived from quoted
interest rates. Adjustments for credit risk use observable credit
default swap spreads.
Deferred
and contingent purchase consideration are fair valued using the
present value of the expected future payments, discounted using a
risk adjusted discount rate. A 10% decrease in the discount rate
would result in a $8m increase in the fair value of the
consideration payable.
|
|
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 25.4 (31
December 2018 19.9) and a non-marketability factor of 30% (31
December 2018 30%) was applied.
A 10%
increase in the average P/E ratio would result in a $3m increase
(31 December 2018 $2m) in the fair value of the investments and a
10% decrease in the average P/E ratio would result in a $3m
decrease (31 December 2018 $2m) in the fair value of the
investments. A 10% increase in net assets would result in a $8m
increase (31 December 2018 $8m) in the fair value of investments
and a 10% decrease in net assets would result in a $8m decrease (31
December 2018 $8m) in the fair value of the
investments.
|
|
The
following table reconciles the movements in the fair values of
financial instruments classified as Level 3 during the
period:
|
|
|
Equity
securities
$m
|
Deferred and
contingent purchase
consideration
$m
|
|
|
|
|
|
At 1
January 2019
|
108
|
131
|
|
Additions
|
3
|
-
|
|
Acquisitions
|
1
|
15
|
|
Disposals
|
(1)
|
-
|
|
Valuation
gains recognised in other comprehensive income
|
5
|
-
|
|
Contingent
consideration paid
|
-
|
(4)
|
|
Change
in fair value recorded in financial expenses
|
-
|
10
|
|
Exchange
adjustments
|
-
|
(1)
|
|
|
____
|
____
|
|
At 30 June 2019
|
116
|
151
|
|
|
_____
|
_____
|
15.
|
Commitments and guarantees
|
|
At 30
June 2019, the amount contracted for but not provided for in the
financial statements for expenditure on property, plant and
equipment and intangible assets was $197m (31 December 2018 $136m).
A loan facility of $5m (31 December 2018 $5m) has also been made
available to a hotel owner which remained undrawn at 30 June
2019.
In
limited cases, the Group may provide performance guarantees to
third-party hotel owners to secure management contracts. At 30 June
2019, the amount provided in the financial statements was $1m (31
December 2018 $3m) and the maximum unprovided exposure under such
guarantees was $93m (31 December 2018 $42m).
The
Group may guarantee bank loans made to facilitate third-party
ownership of hotels in which the Group has an equity interest. At
30 June 2019, there were guarantees of $59m in place (31 December
2018 $43m).
|
16.
|
Contingencies
Security incidents
|
|
In
2016, the Group was notified of (a) a security incident at a number
of Kimpton hotels that resulted in unauthorised access to guest
payment card data, and (b) security incidents at a number of IHG
branded hotels including the installation of malware on servers
that processed payment cards used at restaurants and bars of 12 IHG
managed properties, together the Security Incidents. The Group has
now reached agreement with the impacted card networks on the amount
of assessments payable, $3m in total, the vast majority of which
have been settled under the Group’s insurance programmes,
with the balance expected to be similarly recovered.
The
Group may also be exposed to investigations regarding compliance
with applicable State and Federal data security standards, and
legal action from individuals and organisations impacted by the
Security Incidents. Due to the general nature of the regulatory
enquiries received and class action filings to date, other than
described below, it is not practicable to make a reliable estimate
of the possible financial effects of any such claims on the Group
at this time. These contingent liabilities are potentially
recoverable under the Group’s insurance programmes, although
specific agreement will need to be reached with the relevant
insurance providers at the time any claim is made.
To
date, four lawsuits had been filed against IHG entities relating to
the Security Incidents. One of these has been withdrawn and a final
settlement of less than $2m has been agreed in respect of another
lawsuit, although this is expected to be recovered from
insurance.
Other
From
time to time, the Group is subject to legal proceedings the
ultimate outcome of each being always subject to many uncertainties
inherent in litigation. The Group has also given warranties in
respect of the disposal of certain of its former subsidiaries. It
is the view of the Directors that, other than to the extent that
liabilities have been provided for in these financial statements,
it is not possible to quantify any loss to which these proceedings
or claims under these warranties may give rise, however, as at the
date of reporting, the Group does not believe that the outcome of
these matters will have a material effect on the Group’s
financial position.
At 30
June 2019, the Group had no other contingent liabilities (31
December 2018 $nil).
|
|
|
|
|
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 2019 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 16. 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
(UK and Ireland) 2410 ‘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 Guidance and Transparency Rules of the United
Kingdom’s Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the
European Union. The condensed set of financial statements included
in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34,
‘Interim Financial Reporting’, as adopted by the
European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the
condensed set of financial statements in the half-yearly financial
report based on our review.
Scope of Review
We conducted our review in accordance with International Standard
on Review Engagements (UK and Ireland) 2410 ‘Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity’ issued by the Auditing Practices Board for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK and Ireland) and consequently does not enable us to
obtain assurance that we would become aware of all significant
matters that might be identified in an audit. Accordingly, we do
not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes
us to believe that the condensed set of financial statements in the
half-yearly financial report for the six months ended 30 June 2019
is not prepared, in all material respects, in accordance with
International Accounting Standard 34 as adopted by the European
Union and the Disclosure Guidance and Transparency Rules of the
United Kingdom’s Financial Conduct Authority.
Ernst & Young LLP
London
5 August 2019
|
|
|
InterContinental Hotels Group PLC
|
|
|
(Registrant)
|
|
|
|
|
By:
|
/s/ F. Cuttell
|
|
Name:
|
F.
CUTTELL
|
|
Title:
|
ASSISTANT
COMPANY SECRETARY
|
|
|
|
|
Date:
|
06 August 2019
|
|
|
|