SECURITIES AND EXCHANGE COMMISSION

 

 

Washington DC 20549

 

 

FORM 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 AND 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

 

 

For 08 August 2017

 

 

InterContinental Hotels Group PLC


(Registrant's name)

 

 

Broadwater Park, Denham, Buckinghamshire, UB9 5HJ, United Kingdom

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

 

 

Form 20-F           Form 40-F

 

 

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

 

Yes           No

 

 

If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable

 

 

 

 

EXHIBIT INDEX

 

99.1	Half-year Report dated 08 August 2017

 

 

 

 

Exhibit No: 99.1

 

 

InterContinental Hotels Group PLC

 

Half Year Results to 30 June 2017

Financial summary1	Reported			Underlying2
	2017	2016	% Change	2017	2016	% Change
Revenue	$857m	$838m	2%	$788m	$756m	4%
Fee Revenue3	$686m	$673m	2%	$697m	$673m	4%
Operating profit	$370m	$344m	8%	$365m	$340m	7%
Adjusted EPS	113.3¢	89.0¢	27%	111.7¢	87.7¢	27%
Basic EPS4	111.7¢	87.7¢	27%
Interim dividend per share	33.0¢	30.0¢	10%
Net debt	$2,056m	$1,829m

 

1All figures before exceptional items unless otherwise noted.  2Excluding owned asset disposals, managed leases and significant liquidated damages; at constant H1 2016 exchange rates (CER).  Underlying adjusted EPS based on underlying EBIT, effective tax rate, and reported interest at actual exchange rates5.  3Group revenue excluding owned & leased hotels, managed leases and significant liquidated damages.  4After exceptional items.

 

Keith Barr, Chief Executive of InterContinental Hotels Group PLC, said:

"We have had a good first half. RevPAR growth of 2.1% and net system size growth of 3.7% delivered a 7% increase in underlying operating profit and a 27% increase in underlying EPS, underpinning the Board's decision to increase the interim dividend by 10%. We continue to make good progress in executing our well-established strategy to deliver high quality sustainable growth, and during the half we passed the landmark of over 1 million open or pipeline rooms.  In June, we announced a new, midscale brand to address a $20 billion underserved segment in the US. We believe this will become another brand of scale for IHG that will deliver superior returns to our owners. Other highlights include the continued roll-out of new design formats across our Holiday Inn Brand Family and the ongoing repositioning of Crowne Plaza. Leveraging our technological capabilities, we are on track to begin roll out of our next generation cloud-based Guest Reservation System in late 2017. I feel privileged to be the new CEO of IHG and to have the opportunity to build on the strong performance we have delivered. My focus is on driving an acceleration in our growth rate, by increasing the resources dedicated behind the highest opportunity markets and segments, strengthening our brand portfolio, building on our leading loyalty proposition, and enhancing our competitive advantage through prioritising digital and technological innovation. We will continue to focus on enhancing our cost efficiency to generate funds for reinvestment.  This, combined with our cash-generative business model and disciplined approach to capital allocation, will drive superior returns to shareholders. While we will always face macro-economic and geopolitical uncertainties, we remain confident in the outlook for 2017."

Financial Highlights

●    Solid revenue growth driven by both RevPAR and rooms -     Global comparable H1 RevPAR growth of 2.1%, led by occupancy up 0.9%pts. Q2 RevPAR up 1.5%, including a decline of -0.4% in the US, adversely impacted by the timing of Easter. -     3.7% net room growth year on year, with 23k room openings, up 31% year on year, which includes 3.5k rooms in Makkah, Saudi Arabia, signed in 2015. ●    High-quality business model, focused on disciplined execution, capital allocation and shareholder returns -     Group fee margin of 51.0%, up 2.4%pts (1.5%pts CER); favourable cost phasing and efficiency improvements. -     Focused investment and asset recycling led to net capital expenditure5 of $162m (gross: $186m). -     $0.4bn returned to shareholders in May via a $2.025 per share special dividend with 45 for 47 share consolidation. -     10% increase in interim dividend to 33.0¢ reflects confidence in our long-term sustainable growth.

Strategic Progress

●   Strengthening our portfolio of preferred brands -     Launch, in June, of a high quality midscale brand in the US, leveraging our expertise across the mainstream6 segment where we already have a 21% share of supply and 24% share of pipeline, to build another brand of scale for IHG.  Early interest in the brand from our ~2,000 existing franchisees has been highly encouraging. -     Continued to roll out innovative guest room and public area enhancements for the Holiday Inn Brand Family; new designs now in more than 400 hotels across US and Europe, driving mid-single digit increases in guest satisfaction. -     Positive response to Crowne Plaza US Accelerate programme, with owner capital commitments of ~$190m in the last year in hotel purchases and major refurbishment in addition to ~30 hotels committing to renovating guest rooms.    -     Growing our boutique footprint, with the opening of our second Kimpton outside the US, in Amsterdam, and six more US openings planned this year; and our Hotel Indigo open and pipeline hotels reaching over 150 globally, with openings in Bali and Los Angeles and signings in Beijing and London's Leicester Square.

●   Growing through targeted hotel distribution -     Signed 32k rooms into the pipeline, taking it to 230k rooms. ~45% of the pipeline is under construction.

●   Driving revenue delivery through technology and loyalty -    Innovative cloud-based Guest Reservation System on track for roll-out in 2017, with full deployment expected by late 2018/early 2019. Positive feedback on transformational user-interface.  -    Continued focus on driving direct bookings with the completion of the global roll out of 'Your Rate by IHG Rewards Club' following the Q1 launch in Greater China.  Loyalty contribution up 0.4%pts YoY and enrolments up 12% YoY.

5For definition of non-GAAP measures and reconciliation to GAAP measures refer to the Interim Management Report. 6 Mainstream includes STR midscale and upper midscale segments.

 

Americas - RevPAR growth slows in second quarter as Easter benefit reverses

Comparable RevPAR increased 1.1% (Q2: 0.1%), driven by 1.1% rate growth.   US RevPAR grew 0.7%, with a decline of -0.4% in Q2, adversely impacted by the shift in timing of Easter.  Holiday Inn and Holiday Inn Express RevPAR grew 1.1% (Q2: 0.2%) and 0.6% (Q2: -0.1%) respectively.  Combined these brands delivered a 6% absolute RevPAR premium to the upper midscale segment.  Outside of the US, RevPAR grew 4.6%. Canada's 150th anniversary celebrations generated solid demand in urban markets with RevPAR growth of 4.3%, whilst growth in the Mexican economy, buoyed by a relatively weak Peso, contributed to RevPAR growth of 9.1%. Reported revenue increased 2% (2% CER) and reported operating profit pre-exceptional items increased 3% (3% CER), whilst on an underlying1 basis both revenue and operating profit increased 3%. On an underlying1 basis, franchised operating profit grew 1% as incremental royalties from RevPAR and net rooms growth were partly offset by lower revenues from hotel signings and the annualisation of our $7m investment in the Americas development team, $4m of which was incurred in H2 2016. Underlying1 managed operating profit increased 7% benefitting from the continued ramp up of the InterContinental New York Barclay, following its refurbishment and lower costs associated with our 20% interest in the hotel. Underlying1 owned revenue and operating profit increased 12% and 25% respectively as the Holiday Inn Aruba benefitted from increased North American inbound business. We opened 11k rooms (95 hotels), including the 900 room InterContinental Los Angeles Downtown. 9k rooms (63 hotels) were removed primarily across the Holiday Inn, Holiday Inn Express and Crowne Plaza brands as we continue to focus on high quality brand representation. We signed 16k rooms, including the first Kimpton in Mexico and more than 11k rooms (112 hotels) for the Holiday Inn Brand Family.

Europe - Strong trading drives double digit profit growth

Comparable RevPAR increased 6.2% (Q2: 5.5%), driven equally by rate and occupancy. UK RevPAR increased by 6.7%, with strong trading in both London (9.0%) and the provinces (5.4%). In Germany, RevPAR growth for the half was 2.3%, Q2 RevPAR declined -3.6% as the estate lapped very strong comparables relating to trade show activity in 2016 in Dusseldorf and Munich. Trading in Paris continues to recover with RevPAR up 11.6% in H1 driven by occupancy gains (8.0%pts). Reported revenue increased 4% (8% CER) and reported operating profit was up 12% (12% CER).  On an underlying1 basis revenue increased 11% and operating profit increased 12%.  We opened 1k rooms (8 hotels) including the Kimpton De Witt in Amsterdam, our first Kimpton hotel in Europe, and signed 3k rooms (20 hotels) including a Hotel Indigo in London's Leicester Square. In Germany, we signed 10 hotels and opened three, taking the total open and pipeline hotels to 112.

AMEA - Solid trading in key markets offset by weakness in the Middle East

Comparable RevPAR increased 1.4% (Q2: 2.7%). Performance outside the Middle East continued to be strong, with 4.2% RevPAR growth. India was up 14.3%, whilst Japan, Australasia and South-East Asia were up low to mid-single digits. In the Middle East, RevPAR declined -3.7% due to the ongoing impact of low oil prices and industry wide supply growth. RevPAR growth was flat in Q2, due to the favourable timing of Ramadan as well as improved royal business in Saudi Arabia. We expect trading conditions for the rest of the year to remain challenging. The increasing mix of new rooms opening in developing markets meant that total RevPAR declined -1.9% in the half (Q2: -1.0%). Reported revenue was flat (2% CER) and operating profit was up 5% (10% CER). On an underlying1 basis, revenue was up 1% and operating profit increased 11% benefitting from the favourable phasing of costs. We still expect managed profit in 2017 to be broadly in line with 2016. We opened 7k rooms (9 hotels) in the half, including the first Hotel Indigo resort, in Bali, the first Staybridge Suites in Saudi Arabia and 3.5k rooms in Makkah, Saudi Arabia. The rooms in Makkah relate to the remaining portion of the 5k room signing that we announced in 2015 and, on an annualised basis, are expected to generate ~$1m in fees. We signed 3k rooms (15 hotels) including three deals in Australia and 1.3k rooms for the Holiday Inn Brand Family.

1Excluding owned asset disposals, managed leases, significant liquidated damages at constant H1 16 exchange rates (CER).  See the Interim Management Report for definition of non-GAAP measures and reconciliation to GAAP measures.

 

 

Greater China - Strong mainland trading and 9% rooms growth drive 15% profit growth

Comparable RevPAR increased 4.1% (Q2: 4.4%), with growth of 5.1% in mainland China. RevPAR growth in Hong Kong was flat whilst Macau increased 2.1%.  Mainland tier 1 cities continued to trade well, with RevPAR up 5.4% in the half driven by strong meeting and corporate demand, particularly in Shanghai.  Tier 2-4 cities also benefitted from solid meeting demand, leisure groups and the benefit of hotels still ramping up, with occupancy gains driving RevPAR growth of 5.2%. Our strategy to maximise our long-term growth potential by using our mainstream brands to penetrate less developed cities impacted total RevPAR, which declined -0.3% for the region. Reported revenue and operating profit increased by 6% (11% CER) and 15% (15% CER) respectively. Underlying1 revenue increased 11% and underlying operating profit grew 15%, driven by strong trading in mainland China, 9% rooms growth and increased revenues from signing and opening hotels. We opened 4k rooms (16 hotels) in the half, including our 300th hotel (the 340 room HUALUXE Zhangjiakou), our 40th InterContinental in the region (the 370 room InterContinental Jinan City Centre), and the first two Holiday Inn Express Franchise Plus properties. Signings for the half totalled 10k rooms, or 46 hotels, the highest number on record. This included the 420 room InterContinental Guangzhou Downtown and the 255 room InterContinental Zhengzhou, and 34 Holiday Inn Express hotels, including 24 on Franchise Plus contracts.

Highly cash generative business with disciplined approach to capital allocation

●   Consistent fee margin growth -    Reported central overheads declined $9m, or $4m on a constant currency basis, benefiting from a $4m increase in central revenues and efficiency improvements. -    Group fee margin of 51.0%, up 2.4%pts (1.5%pts CER), benefiting from efficiency improvements and favourable cost phasing.  Full year margin growth currently expected to be in the region of the long-term average of ~135bps.  ●    Significant free cash flow from operations -    Free cash flow2 of $204m compares to $241m in H1 2016 (excluding the $95m benefit from renegotiation of long term partnership agreements), impacted by movement in system fund balances.

●    Investing for growth -     $186m gross capital expenditure in first half: $44m maintenance capex2 and key money; $80m recyclable investments2 (including $43m in relation to associates and joint ventures); and $62m system funded capital investments.  $7m proceeds received from asset recycling and $17m system fund depreciation released from the system fund surplus, resulting in $162m of net capital expenditure. -     Gross capex guidance remains unchanged at up to $350m p.a. into the medium term. ●    Shareholder returns -     10% increase in the interim dividend to 33.0¢. -     $0.4bn returned to shareholders in May via a $2.025 per share special dividend, in conjunction with a 45 for 47 share consolidation.

●    Efficient balance sheet provides flexibility -   Robust financial position, with on-going commitment to an efficient balance sheet and investment grade credit rating.   -   Net debt2 of $2,056m (including $228m finance lease on InterContinental Boston), up $0.6bn on the 2016 close following the payment of the $0.4bn special dividend in May.  Net debt to EBITDA now stands at 2.5x (LTM).

Foreign exchange - minimal impact on reported profit

Revenue impacts of the strong dollar against a number of currencies were offset by cost benefits from the devaluation of sterling against the dollar compared to H1 2016, increasing reported profit by $1m.  If the closing June 2017 exchange rates had existed through H2 2016, there would have been no impact on reported operating profit for that period.   A full breakdown of constant currency vs. actual currency RevPAR by region is set out in Appendix 2.

Interest, tax, and exceptional items

Interest: Net financial expenses reduced by $1m to $40m due to a reduction in the cost of debt following the bond refinancing in 2016 and the favourable impact of a weaker pound on translation of sterling interest expense, offset by higher average net debt levels following the payment of the 2016 $1.5bn special dividend.

Tax: Based on the position at the end of the half, the tax charge has been calculated using an interim effective tax rate of 33% (H1 2016: 33%).  We continue to expect the full year 2017 tax rate to be in the low 30s (%).

Exceptional operating items:  $4m exceptional operating charge (2016: $5m charge) relating to the Kimpton integration.

1Excluding owned asset disposals, managed leases and significant liquidated damages; at constant H1 16 exchange rates (CER). 2 For definition of non-GAAP measures and reconciliation to GAAP measures see the Interim Management Report.

 

 

Appendix 1: Comparable RevPAR Movement Summary
	Half Year 2017			Q2 2017
	RevPAR	Rate	Occ.	RevPAR	Rate	Occ.
Group	2.1%	0.8%	0.9%pts	1.5%	0.9%	0.4%pts
Americas	1.1%	1.1%	0.0%pts	0.1%	0.9%	(0.6)%pts
Europe	6.2%	3.2%	2.0%pts	5.5%	3.3%	1.6%pts
AMEA	1.4%	(1.2)%	1.9%pts	2.7%	0.2%	1.7%pts
G. China	4.1%	(1.1)%	3.2%pts	4.4%	(0.8)%	3.4%pts

 

Appendix 2: RevPAR movement summary at constant exchange rates (CER) vs. actual exchange rates (AER)
	Half Year 2017			Q2 2017
	CER	AER	Difference	CER	AER	Difference
Group	2.1%	0.6%	1.5%pts	1.5%	0.0%	1.5%pts
Americas	1.1%	0.9%	0.2%pts	0.1%	(0.2)%	0.3%pts
Europe	6.2%	(0.4)%	6.6%pts	5.5%	(0.1)%	5.6%pts
AMEA	1.4%	0.4%	1.0%pts	2.7%	1.0%	1.7%pts
G. China	4.1%	0.0%	4.1%pts	4.4%	0.3%	4.1%pts

 

	Appendix 3: Half Year System & Pipeline Summary (rooms)
		System					Pipeline
		Openings	Removals	Net	Total	YoY%*	Signings	Total
Group		22,857	(12,317)	10,540	777,675	3.7%	31,773	229,526
Americas		10,618	(8,662)	1,956	489,949	1.6%	15,814	102,578
Europe		1,443	(1,150)	293	110,362	3.6%	3,128	23,974
AMEA		6,910	(1,029)	5,881	81,932	11.6%	3,003	34,807
G. China		3,886	(1,476)	2,410	95,432	9.3%	9,828	68,167

 

* compared to H1 2016

 

Appendix 4: Half Year financial headlines
Operating Profit $m	Total		Americas		Europe		AMEA		G. China		Central
	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016
Franchised	343	340	298	295	37	37	7	6	1	2	-	-
Managed	120	113	33	32	12	10	43	42	32	29	-	-
Owned & leased	16	13	15	12	0	0	1	1	0	0	-	-
Regional overheads	(56)	(60)	(25)	(26)	(11)	(13)	(10)	(10)	(10)	(11)	-	-
Profit pre central overheads	423	406	321	313	38	34	41	39	23	20	-	-
Central overheads	(53)	(62)	-	-	-	-	-	-	-	-	(53)	(62)
Group Operating profit ex. Exceptional items	370	344	321	313	38	34	41	39	23	20	(53)	(62)
Exceptional Items	(4)	(5)	(4)	(5)	-	-	-	-	-	-	-	-
Group Operating profit	366	339	317	308	38	34	41	39	23	20	(53)	(62)

 

 

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

Total***

Americas

Europe

AMEA

G. China

Reported

Actual*

CER**

Actual*

CER**

Actual*

CER**

Actual*

CER**

Actual*

CER**

Growth / (decline)

8%

7%

3%

3%

12%

12%

5%

10%

15%

15%

Underlying**** Growth / (decline)

Total***

Americas

Europe

AMEA

G. China

7%

3%

12%

11%

15%

Exchange rates:

GBP:USD

EUR:USD

* US dollar actual currency

H1 2017

0.79

0.92

** Translated at constant H1 2016 exchange rates 1

H1 2016

0.70

0.90

*** After central overheads

 

Appendix 6: Definitions

CER: constant exchange rates with H1 2016 exchange rates applied to H1 2017. Comparable RevPAR: Revenue per available room for hotels that have traded for all of 2016 and 2017, reported at CER. Fee revenue: Group revenue excluding owned and leased hotels, managed leases and significant liquidated damages. Fee margin: adjusted for owned and leased hotels, managed leases and significant liquidated damages. Managed lease hotels: properties structured for legal reasons as operating leases but with the same characteristics as management contracts Americas: Revenue H1 2017 $18m; H1 2016 $20m; EBIT H1 2017 $1m, H1 2016 $1m. Europe: Revenue H1 2017 $38m; H1 2016 $38m; EBIT H1 2017 $1m, H1 2016 $1m. AMEA: Revenue H1 2017 $24m; H1 2016 $24m; EBIT H1 2017 $2m, H1 2016 $2m. Significant liquidated damages: $nil in H1 2017; $nil in H1 2016. Total gross revenue: total rooms revenue from franchised hotels and total hotel revenue from managed, owned and leased hotels. Other than owned and leased hotels, it is not revenue attributable to IHG, as it is derived mainly from hotels owned by third parties. Total RevPAR: Revenue per available room including hotels that have opened or exited in either 2016 or 2017, reported at CER.

 

Appendix 7: Investor information for 2017 interim dividend
Ex-dividend date:	31 August 2017	Record date:	1 September 2017	Payment date:	6 October 2017
Dividend payment:	ADRs: 33.0 cents per ADR; The corresponding amount in Pence Sterling per ordinary share will be announced on 20th September 2017, calculated based on the average of the market exchange rates for the three working days commencing 15th September.

 

For further information, please contact:
Investor Relations (Heather Wood; Neeral Morzaria; Tom Yates):	+44 (0)1895 512 176	+44 (0)7808 098 724
Media Relations (Yasmin Diamond; Mark Debenham):	+44 (0)1895 512 097	+44 (0)7527 424 046
Webcast 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 London time on 8th August on the web address www.ihgplc.com/interims17.  For those wishing to ask questions please use the dial in details below which will have a Q&A facility.  The webcast replay will be available on the website later on the day of the results and will remain on it for the foreseeable future.
International dial-in: US dial-in: Passcode:	+44 (0)203 059 8125 +1 724 928 9460 IHG Investor
A replay of the conference call will also be available following the event - details are below.
Replay: Pin:	+44 (0)121 260 4861 6653618#
US conference call and Q&A: An additional conference call, primarily for US investors and analysts, at 9:00am New York Time on 8th August. There will be an opportunity to ask questions.
International dial-in: US dial-in: Passcode:	+44 (0)203 059 8125 +1 724 928 9460 IHG Investor
A replay of the conference call will also be available following the event - details are below.
Replay: Pin:	+44 (0)121 260 4861 6654548#
Website: The full release and supplementary data will be available on our website from 7:00am (London time) on 8th August.  The web address is www.ihgplc.com/interims17

 

 

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, Hotel Indigo®, EVEN® Hotels, HUALUXE® Hotels and Resorts, Crowne Plaza® Hotels & Resorts, Holiday Inn®, Holiday Inn Express®, Holiday Inn Club Vacations®, Holiday Inn Resort®, Staybridge Suites® and Candlewood Suites®.   IHG franchises, leases, manages or owns more than 5,200 hotels and nearly 780,000 guest rooms in almost 100 countries, with more than 1,500 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 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.ihgplc.com/media and follow us on social media at: www.twitter.com/ihg, www.facebook.com/ihg and www.youtube.com/ihgplc.

Cautionary note regarding forward-looking statements: This announcement contains certain forward-looking statements as defined under United States law (Section 21E of the Securities Exchange Act of 1934) and otherwise.  These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts.  Forward-looking statements often use words such as 'anticipate', 'target', 'expect', 'estimate', 'intend', 'plan', 'goal', 'believe' or other words of similar meaning.  These statements are based on assumptions and assessments made by InterContinental Hotels Group PLC's management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate.  By their nature, forward-looking statements are inherently predictive, speculative and involve risk and uncertainty.  There are a number of factors that could cause actual results and developments to differ materially from those expressed in or implied by, such forward-looking statements.  The main factors that could affect the business and the financial results are described in the 'Risk Factors' section in the current InterContinental Hotels Group PLC's Annual report and Form 20-F filed with the United States Securities and Exchange Commission.

 

 

 

INTERIM MANAGEMENT REPORT

 

This Interim Management Report discusses the performance of InterContinental Hotels Group PLC

(the Group or IHG) for the six months ended 30 June 2017.

 

GROUP

		6 months ended 30 June
Group results		2017	2016	%
		$m	$m	change
Revenue
	Americas	499	490	1.8
	Europe	113	109	3.7
	AMEA	115	115	-
	Greater China	58	55	5.5
	Central	72	69	4.3
		____	____	____
Total		857	838	2.3
		____	____	____
Operating profit before exceptional items
	Americas	321	313	2.6
	Europe	38	34	11.8
	AMEA	41	39	5.1
	Greater China	23	20	15.0
	Central	(53)	(62)	14.5
		____	____	____
		370	344	7.6
Exceptional operating items		(4)	(5)	20.0
		____	____	____
Operating profit		366	339	8.0
Net financial expenses		(40)	(41)	2.4
		____	____	____
Profit before tax		326	298	9.4
		____	____	____
Earnings per ordinary share
	Basic	111.7¢	87.7¢	27.4
	Adjusted	113.3¢	89.0¢	27.3
Average US dollar to sterling exchange rate		$1 : £0.79	$1 : £0.70	12.9

 

 

During the six months ended 30 June 2017, revenue increased by $19m (2.3%) to $857m and operating profit increased by $27m (8.0%) to $366m.

 

Underlying1 Group revenue and underlying1 Group operating profit increased by $32m (4.2%) and $25m (7.4%) respectively.

 

The net central operating loss before exceptional items decreased by $9m (14.5%) to $53m compared to 2016 and by $4m (6.5%) to $58m at constant currency.

 

Profit before tax increased by $28m to $326m. Basic earnings per ordinary share increased by 27.4% to 111.7¢, whilst adjusted earnings per ordinary share increased by 27.3% to 113.3¢.

 

1 Underlying excludes significant liquidated damages and the results from managed-lease hotels, translated at constant currency by applying

prior-year exchange rates (see the Use of Non-GAAP measures section later in this Interim Management Report).

 

 

 

		Hotels		Rooms
Global hotel and room count			Change over		Change over
		2017 30 June	2016 31 December	2017 30 June	2016 31 December
Analysed by brand
	InterContinental	188	1	64,572	922
	Kimpton	60	(1)	11,374	136
	HUALUXE	5	1	1,436	340
	Crowne Plaza	410	2	114,027	224
	Hotel Indigo	79	4	9,515	610
	EVEN Hotels	6	-	1,010	-
	Holiday Inn1	1,217	(24)	226,941	(4,815)
	Holiday Inn Express	2,542	45	253,904	6,895
	Staybridge Suites	245	9	26,612	1,002
	Candlewood Suites	374	12	35,251	1,059
	Other	95	(2)	33,033	4,167
		____	____	______	_____
Total		5,221	47	777,675	10,540
		____	____	______	_____
Analysed by ownership type
	Franchised	4,352	31	543,049	399
	Managed	861	16	232,268	10,195
	Owned and leased	8	-	2,358	(54)
		____	____	______	_____
Total		5,221	47	777,675	10,540
		____	____	______	_____

1Includes 46 Holiday Inn Resort properties (11,653 rooms) and 26 Holiday Inn Club Vacations properties (7,676 rooms)

  (2016: 46 Holiday Inn Resort properties (11,652 rooms) and 26 Holiday Inn Club Vacations properties (7,601 rooms)).

 

 

			Hotels				Rooms
Global pipeline					Change over			Change over
			2017 30 June		2016 31 December		2017 30 June	2016 31 December
Analysed by brand
	InterContinental		63		1		17,044	(436)
	Kimpton		17		(1)		2,863	(235)
	HUALUXE		21		(1)		6,556	(400)
	Crowne Plaza		85		(5)		23,748	(788)
	Hotel Indigo		76		1		10,486	(107)
	EVEN Hotels		7		1		1,065	285
	Holiday Inn1		270		9		53,501	823
	Holiday Inn Express		702		26		86,451	2,569
	Staybridge Suites		151		11		16,454	1,133
	Candlewood Suites		107		(1)		9,608	4
	Other		14		2		1,750	(3,398)
			____		____		______	_____
Total			1,513		43		229,526	(550)
			____		____		______	_____
Analysed by ownership type
	Franchised		1,097		58		124,944	7,250
	Managed		416		(15)		104,582	(7,800)
			____		____		______	_____
Total			1,513		43		229,526	(550)
			____		____		______	_____

 

1Includes 14 Holiday Inn Resort properties (3,601 rooms) (2016: 14 Holiday Inn Resort properties (3,531 rooms)).

 

 

 

 

THE AMERICAS

			6 months ended 30 June
Americas Results			2017	2016	%
			$m	$m	change
Revenue
	Franchised		343	338	1.5
	Managed		82	86	(4.7)
	Owned and leased		74	66	12.1
			____	____	____
Total			499	490	1.8
			____	____	____
Operating profit before exceptional items
	Franchised		298	295	1.0
	Managed		33	32	3.1
	Owned and leased		15	12	25.0
	Regional overheads		(25)	(26)	3.8
			____	____	____
			321	313	2.6
Exceptional items			(4)	(5)	20.0
			____	____	____
Operating profit			317	308	2.9
			____	____	____

                                                                                               

Americas Comparable RevPAR movement on previous year		6 months ended 30 June 2017
Franchised
	Crowne Plaza	0.2%
	Holiday Inn	1.8%
	Holiday Inn Express	0.8%
	All brands	1.1%
Managed
	InterContinental	(2.0)%
	Kimpton	2.1%
	Crowne Plaza	1.4%
	Holiday Inn	(1.1)%
	Staybridge Suites	(1.3)%
	Candlewood Suites	(0.4)%
	All brands	0.5%
Owned and leased
	All brands	7.6%

 

 

Franchised revenue increased by $5m (1.5%) to $343m and operating profit increased by $3m (1.0%) to $298m. On a constant currency basis, revenue increased by $5m (1.5%) to $343m and operating profit increased by $4m (1.4%) to $299m. Royalties1 growth of 2.1% was driven by 1.6% rooms growth year-on-year and comparable RevPAR growth of 1.1%.

 

Managed revenue decreased by $4m (4.7%) to $82m, and operating profit increased by $1m (3.1%) to $33m. Revenue and operating profit included $18m (2016: $20m) and $1m (2016: $1m) respectively from one managed lease property2. Excluding results from this managed lease hotel, and on a constant currency basis, revenue remained flat and operating profit increased by $2m (6.5%).

 

Owned and leased revenue increased by $8m (12.1%) to $74m, and operating profit increased by $3m (25.0%) to $15m. On a constant currency basis, owned and leased revenue increased by $8m (12.1%), and operating profit increased by $3m (25.0%), as one hotel benefited from increased North Americas inbound business.

 

1 Royalties are fees, based on rooms revenue, that a franchisee pays to the brand owner for use of the brand name.

2 A property that is structured for legal reasons as an operating lease but has the same characteristics as a management contract.

 

 

		Hotels		Rooms
Americas hotel and room count			Change over		Change over
		2017 30 June	2016 31 December	2017 30 June	2016 31 December
Analysed by brand
	InterContinental	49	1	17,302	894
	Kimpton	59	(2)	11,100	(138)
	Crowne Plaza	161	(3)	42,748	(1,368)
	Hotel Indigo	48	2	6,418	486
	EVEN Hotels	6	-	1,010	-
	Holiday Inn1	762	(12)	134,283	(2,461)
	Holiday Inn Express	2,183	29	196,033	3,662
	Staybridge Suites	234	8	25,110	925
	Candlewood Suites	374	12	35,251	1,059
	Other	81	(3)	20,694	(1,103)
		____	____	______	_____
Total		3,957	32	489,949	1,956
		____	____	______	_____
Analysed by ownership type
	Franchised	3,665	32	431,648	782
	Managed	286	-	56,476	1,174
	Owned and leased	6	-	1,825	-
		____	____	______	_____
Total		3,957	32	489,949	1,956
		____	____	______	_____

 

1Includes 25 Holiday Inn Resort properties (6,787 rooms) and 26 Holiday Inn Club Vacations (7,676 rooms)

  (2016: 25 Holiday Inn Resort properties (6,791 rooms) and 26 Holiday Inn Club Vacations (7,601 rooms)).

 

 

		Hotels		Rooms
Americas pipeline			Change over		Change over
		2017 30 June	2016 31 December	2017 30 June	2016 31 December
Analysed by brand
	InterContinental	6	(1)	1,642	(890)
	Kimpton	16	(1)	2,714	(235)
	Crowne Plaza	15	(2)	3,256	(30)
	Hotel Indigo	31	(1)	3,580	(385)
	EVEN Hotels	6	-	775	(5)
	Holiday Inn1	137	9	17,892	588
	Holiday Inn Express	496	8	46,930	134
	Staybridge Suites	141	10	14,798	902
	Candlewood Suites	107	(1)	9,608	4
	Other	12	1	1,383	44
		____	____	______	_____
Total		967	22	102,578	127
		____	____	______	_____
Analysed by ownership type
	Franchised	925	28	95,802	2,507
	Managed	42	(6)	6,776	(2,380)
		____	____	______	_____
Total		967	22	102,578	127
		____	____	______	_____

 

1Includes three Holiday Inn Resort properties (455 rooms) (2016: three Holiday Inn Resort properties (455 rooms)).

 

 

 

EUROPE

			6 months ended 30 June
Europe results			2017	2016	%
			$m	$m	change
Revenue
	Franchised		50	49	2.0
	Managed		63	60	5.0
			____	____	____
Total			113	109	3.7
			____	____	____
Operating profit before exceptional items
	Franchised		37	37	-
	Managed		12	10	20.0
	Regional overheads		(11)	(13)	15.4
			____	____	____
Operating profit			38	34	11.8
			____	____	____

 

 

Europe comparable RevPAR movement on previous year			6 months ended 30 June 2017
Franchised
	All brands		5.8%
Managed
	All brands		7.5%

 

 

Franchised revenue increased by $1m (2.0%) to $50m and operating profit remained flat at $37m. On a constant currency basis, revenue increased by $4m (8.2%) to $53m and operating profit increased by $2m (5.4%) to $39m.

 

Managed revenue increased by $3m (5.0%) to $63m and operating profit increased by $2m (20.0%) to $12m. Revenue included $38m (2016: $38m), and operating profit included $1m (2016: $1m) from managed leases1. Excluding properties operated under this arrangement, and on a constant currency basis, revenue increased by $4m (18.2%) and operating profit increased by $2m (22.2%).

 

 

1 Properties that are structured for legal reasons as an operating lease but have the same characteristics as a management contract.

 

		Hotels		Rooms
Europe hotel and room count			Change over		Change over
		2017 30 June	2016 31 December	2017 30 June	2016 31 December
Analysed by brand
	InterContinental	31	-	9,724	-
	Kimpton	1	1	274	274
	Crowne Plaza	94	2	21,633	746
	Hotel Indigo	22	1	1,970	60
	Holiday Inn1	282	(9)	46,112	(1,717)
	Holiday Inn Express	239	5	29,508	930
	Staybridge Suites	7	-	1,000	-
	Other	1	-	141	-
		____	____	______	_____
Total		677	-	110,362	293
		____	____	______	_____
Analysed by ownership type
	Franchised	624	(5)	95,788	(1,242)
	Managed	53	5	14,574	1,535
		____	____	______	_____
Total		677	-	110,362	293
		____	____	______	_____

 

1Includes one Holiday Inn Resort property (88 rooms) (2016: one Holiday Inn Resort properties (88 rooms)).

 

 

 

		Hotels		Rooms
Europe pipeline			Change over		Change over
		2017 30 June	2016 31 December	2017 30 June	2016 31 December
Analysed by brand
	InterContinental	6	-	813	-
	Kimpton	1	-	149	-
	Crowne Plaza	13	(1)	3,003	(182)
	Hotel Indigo	18	-	2,211	(53)
	Holiday Inn	35	1	7,528	259
	Holiday Inn Express	60	2	9,444	49
	Staybridge Suites	6	1	826	189
		____	____	______	_____
Total		139	3	23,974	262
		____	____	______	_____
Analysed by ownership type
	Franchised	118	7	18,784	876
	Managed	21	(4)	5,190	(614)
		____	____	______	_____
Total		139	3	23,974	262
		____	____	______	_____

 

 

 

ASIA, MIDDLE EAST AND AFRICA (AMEA)

			6 months ended 30 June
AMEA results			2017	2016	%
			$m	$m	change
Revenue
	Franchised		8	8	-
	Managed		90	90	-
	Owned and leased		17	17	-
			____	____	____
Total			115	115	-
			____	____	____
Operating profit before exceptional items
	Franchised		7	6	16.7
	Managed		43	42	2.4
	Owned and leased		1	1	-
	Regional overheads		(10)	(10)	-
			____	____	____
Operating profit			41	39	5.1
			____	____	____

 

 

AMEA comparable RevPAR movement on previous year		6 months ended 30 June 2017
Franchised
	All brands	(1.9)%
Managed
	All brands	2.0%

 

 

On an actual and constant currency basis, franchised revenue remained flat at $8m whilst operating profit increased by $1m (16.7%) to $7m.

 

Managed revenue remained flat at $90m and operating profit increased by $1m (2.4%) to $43m. Comparable RevPAR increased by 2.0%. Revenue and operating profit included $24m (2016: $24m) and $2m (2016: $2m) respectively from one managed lease property1. Excluding results from this hotel and on a constant currency basis, revenue increased by $1m (1.5%) and operating profit increased by $3m (7.5%) benefiting from the favourable phasing of costs.

 

In the owned and leased estate, on an actual and constant currency basis, revenue and operating profit remained flat at $17m and $1m respectively.

 

1 A property that is structured for legal reasons as an operating lease but has the same characteristics as a management contract.

 

 

		Hotels		Rooms
AMEA hotel and room count			Change over		Change over
		2017 30 June	2016 31 December	2017 30 June	2016 31 December
Analysed by brand
	InterContinental	68	(1)	20,890	(313)
	Crowne Plaza	75	2	21,296	547
	Hotel Indigo	3	1	382	59
	Holiday Inn1	92	(1)	21,175	(137)
	Holiday Inn Express	34	-	7,693	110
	Staybridge Suites	4	1	502	77
	Other	8	2	9,994	5,538
		____	____	______	_____
Total		284	4	81,932	5,881
		____	____	______	_____
Analysed by ownership type
	Franchised	57	2	13,023	453
	Managed	225	2	68,376	5,482
	Owned and leased	2	-	533	(54)
		____	____	______	_____
Total		284	4	81,932	5,881
		____	____	______	_____

 

1Includes 14 Holiday Inn Resort properties (2,958 rooms) (2016: 14 Holiday Inn Resort properties (2,953 rooms))

 

 

		Hotels		Rooms
AMEA pipeline			Change over		Change over
		2017 30 June	2016 31 December	2017 30 June	2016 31 December
Analysed by brand
	InterContinental	26	(1)	6,245	(436)
	Crowne Plaza	20	(1)	5,239	(315)
	Hotel Indigo	15	1	2,715	133
	Holiday Inn1	48	(1)	13,003	(261)
	Holiday Inn Express	31	(4)	6,687	(799)
	Staybridge Suites	4	-	830	42
	Other	1	1	88	(3,442)
		____	____	______	_____
Total		145	(5)	34,807	(5,078)
		____	____	______	_____
Analysed by ownership type
	Franchised	12	1	2,605	199
	Managed	133	(6)	32,202	(5,277)
		____	____	______	_____
Total		145	(5)	34,807	(5,078)
		____	____	______	_____

 

1Includes five Holiday Inn Resort properties (1,151 rooms) (2016: five Holiday Inn Resort properties (1,256 rooms))

 

 

 

GREATER CHINA

			6 months ended 30 June
Greater China results			2017	2016	%
			$m	$m	change
Revenue
	Franchised		2	2	-
	Managed		56	53	5.7
			____	____	____
Total			58	55	5.5
			____	____	____
Operating profit before exceptional items
	Franchised		1	2	(50.0)
	Managed		32	29	10.3
	Regional overheads		(10)	(11)	9.1
			____	____	____
Operating profit			23	20	15.0
			____	____	____

 

 

Greater China comparable RevPAR movement on previous year		6 months ended 30 June 2017
Managed
	All brands	4.6%