Interco. Hotels Group delivering best signings performance for a decade

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Interco. Hotels Group (LON:IHG), today announced 6 months results to 30 June 2018

Highlights

· H1 Comparable RevPAR: Americas = 3.2% (US = 2.7%); EMEAA = 3.0%, Greater China = 10.1%.

· 22k room additions, up 11% excluding 3.5k rooms added in Makkah, Saudi Arabia in H1 2017. 10k rooms removed.

· Regent Hotels & Resorts and UK portfolio deals agreed in H1 will complete in Q3, adding 4.2k rooms (1.1k pipeline).

· Highest signings for 10 years; including 16.8k rooms in Greater China, up 71% YOY and our best ever performance.

Reported				Underlying³
2018	2017	% Change		2018	2017	% Change
REPORTABLE SEGMENTS¹
Revenue	$900m	$838m	7%		$875m	$838m	4%
Revenue from fee business	$719m	$664m	8%		$699m	$664m	5%
Operating profit	$406m	$370m	10%		$398m	$370m	8%
Fee margin²	53.5%	52.7%	0.8%pts		54.4%	52.7%	1.7%pts
Adjusted EPS	145.8¢	113.8¢	28%		142.1¢	113.8¢	25%

GROUP RESULTS⁴
Total revenue	$2,113m	$1,964m	8%		KEY METRICS
Operating profit	$394m	$395m	–		· $13.3bn total gross revenue (up 9%)
Basic EPS	123.2¢	126.5¢	(3)%		· 3.7% global H1 RevPAR (Q2 = 3.7%)
Interim dividend per share	36.3¢	33.0¢	10%		· 4.1% net system growth to 810k rooms
Net debt	$1,802m	$2,056m	(12)%		· 46k signings; 262k pipeline rooms

Keith Barr, Chief Executive Officer, IHG, said:

“We’ve had a strong first half, delivering our best signings performance for a decade. RevPAR grew at 3.7%, which together with 4.1% net system size growth, drove underlying operating profit up 8% and underlying EPS up 25%. This underpins our decision to raise the interim dividend by 10%.

Each of our regions continue to deliver strong momentum. This is led by Greater China, where double digit growth in both RevPAR and net system size, as well as record signings, reflects the ongoing benefits of our long term strategic focus on this important market. Demand for our unique Chinese owner proposition “Franchise Plus” continues to be excellent and we now have more than 100 Holiday Inn Express hotels for this model either in the pipeline or open.

In February, we set out a series of new initiatives, funded by a comprehensive efficiency programme, that build on our well-established strategy to drive an acceleration in net rooms growth. Our new organisational structure has enabled us to move at pace; we’ve added three new brands in the last year, avid hotels last September, for which we’ve now signed 130 hotels, voco in June and Regent Hotels & Resorts in July. Our existing brands continue to strengthen, as demonstrated by the continued global expansion of Kimpton Hotels & Restaurants, with flagship hotels secured for four UK locations, including London, as part of a portfolio deal to rebrand and operate 12 high quality hotels in the UK.

Our plans to enhance revenue delivery are on track, with IHG Concerto featuring our innovative new Guest Reservation System now in over half of the estate, with complete roll-out by the end of 2018 / beginning of 2019.

The fundamentals for our industry are strong, we are confident in the outlook for the balance of the year and in our ability to deliver industry-leading net rooms growth over the medium term.”