|
99.1
|
Half Year Results to 30 June 2014
|
||||
|
|
|
||||
|
Financial summary1
|
Reported
|
Underlying2
|
||||
|
H1 2014
|
H1 2013
|
% Change
|
H1 2014
|
H1 2013
|
% Change
|
|
|
Revenue
|
$908m
|
$936m
|
(3)%
|
$788m
|
$757m
|
4%
|
|
Fee Revenue
|
$600m
|
$562m
|
7%
|
$597m
|
$562m
|
6%
|
|
Operating profit
|
$310m
|
$338m
|
(8)%
|
$301m
|
$284m
|
6%
|
|
Adjusted EPS
|
70.7¢
|
78.2¢
|
(10)%
|
68.8¢
|
64.3¢
|
7%
|
|
Basic EPS3
|
93.0¢
|
127.8¢
|
(27)%
|
-
|
-
|
-
|
|
Interim dividend per share
|
25.0¢
|
23.0¢
|
9%
|
-
|
-
|
-
|
|
Net debt
|
$1,031m
|
$861m
|
-
|
-
|
-
|
-
|
|
Richard Solomons, Chief Executive of InterContinental Hotels Group PLC, said:
|
|
"We have achieved a strong first half performance, with our preferred brands continuing to drive good momentum through the second quarter. With underlying operating profit2 up 6% and solid net system growth, our long-term winning strategy is delivering results. This has given us the confidence to increase the interim dividend by 9%.
We have had our best half for signings4 in six years, underpinning our future growth prospects and demonstrating owners' preference for our brands. Openings included the first two EVEN Hotels in the US, a major milestone for this new brand, which satisfies a previously unmet guest need in the wellness segment.
We remain committed to reducing the asset intensity of the business, completing two asset disposals in the half, and good progress is being made with the strategic review of our remaining owned hotels. During the half we completed our $500m share buyback programme and in July we paid a $750 million special dividend, continuing our long track record of returning funds to shareholders.
Looking ahead, whilst several of our key markets continue to experience some political or economic uncertainty, we are encouraged by current trading trends."
|
|
Delivering high quality, sustainable growth
|
||||
|
•
|
Total gross revenue from hotels in IHG's system of $11.1bn, up 7% (7% CER)
|
|||
|
•
|
Operating profit up 6% on an underlying2 basis; down 8% on a reported basis
|
|||
|
-
|
Underlying profitability reflects adjustments for a net year on year operating profit impact of $(45)m, comprising: $(15)m from disposal of owned hotels; $(33)m from significant liquidated damages receipts, and $3m from managed leases.
|
|||
|
•
|
Global comparable RevPAR growth of 5.8% (rate up 2.3%)
|
|||
|
-
|
Americas 6.7% (US 6.6%); Europe 4.9%; AMEA 3.7%; Greater China 4.3%.
|
|||
|
-
|
Q2 comparable RevPAR up 5.7%: Americas 6.7% (US 6.7%); Europe 4.1%; AMEA 3.6%; Greater China 4.6%.
|
|||
|
•
|
Total system size of 693k rooms (4,732 hotels), 2.2% year on year growth
|
|||
|
-
|
17k rooms (109 hotels) opened, led by 9k rooms in the Americas and 4k rooms in Greater China. 11k rooms removed in-line with our on-going commitment to quality.
|
|||
|
-
|
Pipeline of 187k rooms (1,175 hotels), over 45% under construction and over 50% in developing markets.
|
|||
|
-
-
|
Signings of 30k rooms (208 hotels), our best H1 for underlying4 signings since 2008, supported by continued improvements in the US financing environment.
With 5% share of global industry supply, and 13% share of the active industry pipeline, we remain well positioned for sustainable high quality growth.
|
|||
|
•
|
Building preferred brands
|
|||
|
-
|
First two hotels opened for our new EVEN Hotels brand in June, with an excellent initial guest response.
|
|||
|
-
-
|
Holiday Inn and Crowne Plaza first half outperformance vs their US industry segments5.
Holiday Inn ranked "Highest in Guest Satisfaction Among Mid-scale Full Service Hotel Chains" by J.D. Power and Associates for 4th year running.
|
|||
|
•
|
Best-in-class delivery
|
|||
|
-
|
Strong growth in mobile bookings: up 47% year on year.
|
|||
|
-
|
Strategic relationship with Amadeus formed as we continue to drive innovative solutions to enhance guest experiences across the Guest Journey.
|
|||
|
•
|
Fee based margin of 45.0%, up 1% point year on year
|
|||
|
-
|
Driven by cost efficiencies and scale benefits, with some impact from favourable cost phasing.
|
|||
|
1 All figures are before exceptional items unless otherwise noted. Refer appendices for further financial information and definitions.
|
||||
|
2 At constant exchange rates (CER) and excluding owned asset disposals, significant liquidated damages, and results from managed lease hotels. Underlying adjusted EPS is based on Underlying EBIT and uses effective tax rate and interest as reported at actual exchange rates.
|
||||
|
3 Including exceptional items.
|
4 Adjusted for rooms on US Army bases: 2014: 2k signed, 2013: 4k signed and opened.
|
|||
|
5 On a Total RevPAR basis.
|
||||
|
Americas - Strong RevPAR growth and signings pace
|
|
Comparable RevPAR increased 6.7%, with 3.1% rate growth, and second quarter RevPAR also increased 6.7%. US comparable RevPAR was up 6.6% in the first half and 6.7% in the second quarter.
Reported revenue decreased 5% (CER (5)%) to $435m and reported operating profit decreased 5% (CER (5)%) to $268m, but on an underlying basis1, revenue increased 9% and operating profit increased 7%. This was driven primarily by our franchise business where royalties were up 7%. Underlying1 owned and leased hotel profits increased 80%, driven by 6.7% RevPAR growth at InterContinental Boston, and 30.5% RevPAR growth at Holiday Inn Aruba, which is benefiting from its recent refurbishment. Recent changes to the Venezuelan exchange rate had an unfavourable impact on managed operating profit of approximately $2m, with a further $2m impact expected in the second half.
We opened 9k rooms (74 hotels) in the half, including the first two properties for our new EVEN Hotels brand. Signings of 19k rooms (158 hotels) are up 25% year on year2, as the hotel debt financing environment continues to improve, and included over 100 hotels (12k rooms) for the Holiday Inn brand family. Maintaining the quality of our system by removing hotels that no longer meet the requirements of our brands remains a key focus, and we removed 7k rooms (54 hotels) in the first half. Excluding removals, gross rooms growth was 4%.
The refurbishment of InterContinental New York Barclay is due to commence in the third quarter, with the hotel closing for up to 18 months. IHG's share of the second half loss associated with the hotel joint venture is still expected to be around $5m, which will be reflected in Americas managed results.
___________
1 At CER & excluding owned asset disposals, significant liquidated damages and results from managed lease hotels. Year on year operating profit impact of $(31)m comprising (a) results from owned assets disposals of $(7)m ( H1'14: $(1)m; H1'13: $6m) (b) significant liquidated damages receipts of $(24)m (H1'14: $7m (franchised) of which $4m was previously announced; H1'13: $31m (managed)) and (c) results from managed lease hotels of $nil (H1'14: $1m, H1'13: $1m). Revenue impact set out in appendix 5
|
|
Europe - Strong trading performance in key markets
|
|
Comparable RevPAR increased 4.9%, with second quarter RevPAR up 4.1%. First half trading was particularly strong in the UK, up 8.7%, with high single digit growth in both London and the provinces, while Germany delivered another solid performance with RevPAR up 3.1%.
Reported revenue of $182m was down 12% (CER 16%) and reported operating profit of $38m decreased 28% (CER 32%), but on an underlying basis1, revenue was down 2% and operating profit down 3%. This reflects good operating profit growth in the managed and franchised business driven by mid-single digit RevPAR growth, offset by a $7m operating profit decline at our only remaining owned hotel in this region, InterContinental Paris - Le Grand (with $7m associated revenue decline). As previously guided, this was primarily due to the refurbishment of the historic Salon Opera ballroom and c.15% of the guest rooms at the hotel, with an additional small negative impact from the absence of the biannual Paris air show in 2014. No further impact is expected from the refurbishment for the full year.
We opened 3k rooms (18 hotels) in the half, including three Hotel Indigo hotels in the prime city locations of Rome, Madrid and St Petersburg. We signed 2k rooms (14 hotels) including two Holiday Inn hotels in Germany and three Holiday Inn Express hotels in the UK.
______________
1 At CER & excluding owned asset disposals, significant liquidated damages and results from managed lease hotels. Year on year operating profit impact of $(16)m comprises (a) results from owned assets disposals of $(8)m ( H1'14: $nil; H1'13: $8m) (b) significant liquidated damages receipts of $(9)m (H1'14: $nil; H1'13: $9m (franchised)) and (c) results from managed lease hotels of $1m (H1'14: $nil, H1'13: $(1)m).
|
|
AMEA - Rate driven RevPAR growth and increasing contribution from developing markets
|
|
Comparable RevPAR increased 3.7% driven primarily by rate growth, with second quarter RevPAR up 3.6%. Excluding Thailand and Egypt where there has been ongoing political unrest, first half RevPAR increased 5.4%. Performance was led by Japan up 8.8% and South East Asia which, excluding Thailand, was up 7.2%. Australia and the Middle East continue to perform solidly with RevPAR growth of 6.0% and 4.1% respectively.
Total RevPAR grew 1.7%, reflecting an increasing mix of new rooms opening in lower RevPAR developing markets.
Reported revenue increased 15% (CER 19%) to $117m and operating profit decreased 7% (CER (7%)) to $38m. However, on an underlying basis1 revenue was flat, and operating profit decreased 12%. This reflects solid underlying growth in our managed business offset by a $2m increased investment to support future growth, a $3m negative impact from certain small one-off items, and $1m lower fees from our hotels in Thailand. The continuing political unrest in Thailand is expected to have a $2m impact on managed operating profit in the second half of the year. In addition, the managed hotel refurbishment programmes scheduled to take place in 2014, as previously disclosed, had no material impact on fees in the half, but are expected to have a $2m negative impact on fees in the second half of the year.
We opened 2k rooms (8 hotels) in the half, including the 442 room Holiday Inn Express Clarke Quay in Singapore and two Holiday Inn hotels in Japan. We signed 2k rooms (8 hotels) in the first half, including two new hotels in Abu Dhabi, which will mark the entry of a second InterContinental and second Holiday Inn property into the UAE capital.
____________
1 At CER and excluding results from managed lease hotels. Year on year operating profit impact of $2m comprises results from managed lease hotels (H1'14: $2m, H1'13: $nil).
|
|
Greater China - Continued industry outperformance
|
||
|
Comparable RevPAR increased 4.3% driven by occupancy growth, with second quarter RevPAR up 4.6%. This performance was significantly ahead of the industry, which continues to experience a number of challenges including slower macro-economic conditions and austerity measures. Our industry outperformance reflects the strength of IHG's brands in the region and the leading position we have built up over 30 years of operating in the Chinese market.
Total RevPAR for the region decreased 1.4% reflecting an increasing mix of new rooms opening in lower RevPAR developing markets as we increase our distribution across the country.
Reported (and CER) revenue and operating profit were in line with last year at $112m and $36m respectively. This reflects good growth in the managed business, where 16% net rooms growth drove strong incremental fees despite the total RevPAR declines. In addition, the on-going industry austerity measures have continued to impact our food and beverage revenues in the region, up 5% compared to rooms revenues up 9%. InterContinental Hong Kong, our only owned hotel in the region, reported a $3m decrease in revenue to $66m and a $3m decrease in operating profit to $19m due to the continuing impact from the significant redevelopment of the area adjacent to the hotel; this is expected to continue into the second half.
We opened 4k rooms (9 hotels) in the half, including five Crowne Plaza hotels, taking our system size for the brand in the region to 25k rooms. We signed 7k rooms (28 hotels) taking the pipeline to 55k rooms and reflecting the confidence owners have in IHG and the compelling long term growth opportunity for this region.
|
||
|
Sources and uses of cash
|
||
|
•
|
Progress on asset disposals
|
|
|
-
|
Strategic review of opportunities for further asset disposals is progressing well.
|
|
|
-
|
Disposals of InterContinental Mark Hopkins San Francisco and an 80% interest in InterContinental New York Barclay completed with net cash proceeds of $346m.
|
|
|
-
|
$13m proceeds received from recycled investments in the first half.
|
|
|
•
|
Capital Expenditure
|
|
|
-
|
$98m capital expenditure in the first half comprised: $52m maintenance capex and key money; $27m recyclable investments; and $19m system funded capital investments.
|
|
|
-
|
Gross capex guidance remains unchanged at up to $350m per annum into the medium term.
|
|
|
•
|
Continued return of funds to shareholders
|
|
|
-
|
$763m1 returned to shareholders in July via $2.93 per share special dividend with 12 for 13 share consolidation.
|
|
|
$500m share buyback programme completed, including 3.4m shares repurchased for $110m in 2014.
|
||
|
-
|
Ordinary interim dividend up 9% to 25¢ reflects confidence in IHG's future prospects and our cash generative business model.
______________
1 The difference from announced $750m is due to exchange rate movements.
|
|
|
Interest, tax, net debt, and exceptional items
|
||
|
· Interest: H1 charge of $39m (H1 2013: $36m) includes $1m impact from $/£ exchange rate movements. We expect higher interest charges year on year in the second half of 2014 following the payment of the special dividend in July.
· Tax: Based on the position at the end of the half, the tax charge has been calculated using an estimated annual tax rate of 33% (H1 2013: 31%). The full year tax rate is expected to be in the low 30s in 2014 and 2015.
· Net debt: $1,031m at the end of the half (including the $216m finance lease on the InterContinental Boston). This is up from $861m at 30 June 2013 as a result of the $350m special dividend paid in October 2013 and the completion of our $500m share buyback ($257m of which occurred in the 12 month period). Net debt is down on the year end position of $1,153m due to net cash inflow from disposals. The special dividend paid in July will increase net debt to approximately $1.8bn, equivalent to 2.5x last 12 months EBITDA.
· Exceptional items: net exceptional credit of $106m for the half comprised: $130m net gain on asset disposals, $14m charge relating to recent changes to the Venezuelan currency exchange rate mechanisms, and a $10m charge related to corporate restructuring.
|
||
|
Appendix 1: Comparable RevPAR movement summary
|
|||||||
|
Half Year 2014
|
Q2 2014
|
||||||
|
RevPAR
|
Rate
|
Occ.
|
RevPAR
|
Rate
|
Occ.
|
||
|
Group
|
5.8%
|
2.3%
|
2.3pts
|
5.7%
|
2.6%
|
2.1pts
|
|
|
Americas
|
6.7%
|
3.1%
|
2.3pts
|
6.7%
|
3.6%
|
2.1pts
|
|
|
Europe
|
4.9%
|
1.3%
|
2.4pts
|
4.1%
|
1.8%
|
1.7pts
|
|
|
AMEA
|
3.7%
|
2.9%
|
0.6pts
|
3.6%
|
2.5%
|
0.8pts
|
|
|
G. China
|
4.3%
|
(1.4)%
|
3.3pts
|
4.6%
|
(1.8)%
|
3.9pts
|
|
|
Appendix 2: First Half system & pipeline summary (rooms)
|
|||||||
|
System
|
Pipeline
|
||||||
|
Openings
|
Removals
|
Net
|
Total
|
YoY%
|
Signings
|
Total
|
|
|
Group
|
17,298
|
(11,099)
|
6,199
|
693,072
|
2.2%
|
29,844
|
186,534
|
|
Americas
|
8,844
|
(6,819)
|
2,025
|
453,449
|
0.2%
|
18,789
|
82,502
|
|
Europe
|
2,765
|
(2,398)
|
367
|
102,433
|
1.9%
|
2,090
|
16,682
|
|
AMEA
|
1,732
|
(518)
|
1,214
|
66,052
|
6.3%
|
1,966
|
32,415
|
|
G. China
|
3,957
|
(1,364)
|
2,593
|
71,138
|
13.2%
|
6,999
|
54,935
|
|
Appendix 3: First Half financial headlines
|
||||||||||||
|
6 months to 30 June
Operating Profit $m
|
Total
|
Americas
|
Europe
|
AMEA
|
G. China
|
Central
|
||||||
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
|
|
Franchised
|
307
|
294
|
263
|
245
|
36
|
41
|
6
|
6
|
2
|
2
|
-
|
-
|
|
Managed
|
107
|
132
|
25
|
52
|
15
|
12
|
42
|
45
|
25
|
23
|
-
|
-
|
|
Owned & leased
|
30
|
51
|
8
|
11
|
2
|
17
|
1
|
1
|
19
|
22
|
-
|
-
|
|
Regional overheads
|
(64)
|
(65)
|
(28)
|
(26)
|
(15)
|
(17)
|
(11)
|
(11)
|
(10)
|
(11)
|
-
|
-
|
|
Profit pre central overheads
|
380
|
412
|
268
|
282
|
38
|
53
|
38
|
41
|
36
|
36
|
-
|
-
|
|
Central overheads
|
(70)
|
(74)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(70)
|
(74)
|
|
Group operating profit
|
310
|
338
|
268
|
282
|
38
|
53
|
38
|
41
|
36
|
36
|
(70)
|
(74)
|
|
Total1
|
Americas
|
Europe
|
AMEA
|
G. China
|
|||||||||||
|
Actual2
|
CER3
|
Actual2
|
CER3
|
Actual2
|
CER3
|
Actual2
|
CER3
|
Actual2
|
CER3
|
||||||
|
H1 Decline
|
(8)%
|
(8)%
|
(5)%
|
(5)%
|
(28)%
|
(32)%
|
(7)%
|
(7)%
|
0%
|
0%
|
|||||
|
Underlying4
Growth/ (decline)
|
Total3
|
Americas
|
Europe
|
AMEA
|
G. China
|
||||||||||
|
6%
|
7%
|
(3)%
|
(12)%
|
0%
|
|||||||||||
|
Exchange rates:
|
H1
|
1 After central overheads
|
2 US dollar actual exchange rates
|
||||||||||||
|
GBP:USD
|
EUR:USD
|
3 Translated at constant 2013 exchange rates
|
|||||||||||||
|
2014
|
0.60
|
0.73
|
4 At CER and excluding owned asset disposals, results from managed lease hotels & significant liquidated damages.
|
||||||||||||
|
2013
|
0.65
|
0.76
|
|||||||||||||
|
Appendix 5: Definitions
|
|
CER: At constant exchange rates
Comparable RevPAR: Revenue per available room for hotels that have traded for a full 12 months in both years, reported at CER.
Fee revenue: Group revenue excluding owned & leased hotels, managed leases and significant liquidated damages.
Fee margin: adjusted for owned and leased hotels, managed leases and significant liquidated damages receipts.
Managed lease hotels: properties structured for legal reasons as operating leases but with the same characteristics as management contracts
Americas: Revenue H1 2014 $21m; H1 2013 $19m; EBIT H1 2014 $1m, H1 2013 $1m. Europe: Revenue H1 2014 $46m; 2013 $42m; EBIT H1 2014 $nil, H1 2013 $(1)m. AMEA: Revenue H1 2014 $19m; H1 2013 $2m; EBIT H1 2014 $2m, H1 2013 $nil.
Owned asset disposals: Europe: one hotel disposal in 2013 with H1 2014 O&L revenue and profit of $nil; H1 2013 O&L revenue $22m, H1 2013 O&L profit $8m. Americas: two hotel disposals in 2014; H1 2014 O&L revenue $23m, H1 2014 O&L profit $(1)m; H1 2013 O&L revenue $54m, H1 2013 O&L profit $6m.
Significant liquidated damages: total $7m in H1 2014 ($3m and $4m, both in Americas franchise) and $40m in H1 2013 ($31m Americas managed, $9m Europe franchised)
Total gross revenue: total room revenue from franchised hotels and total hotel revenue from managed, owned and leased hotels. It is not revenue attributable to IHG, as it is derived mainly from hotels owned by third parties. The metric is highlighted as an indicator of the scale and reach of IHG's brands.
Total RevPAR: Revenue per available room including results from hotels that have opened or exited in either year, reported at CER.
|
|
Appendix 6: Investor information for 2014 interim dividend
|
|||
|
Ex-dividend date:
|
20 August 2014
|
Record date:
|
22 August 2014
|
|
Payment date:
|
26 September 2014
|
Dividend payment:
|
Ordinary shares = 14.8 pence per share
|
|
ADRs = 25.0 cents per ADR
|
|||
|
For further information, please contact:
|
|||
|
Investor Relations (David Kellett; Isabel Green):
|
+44 (0)1895 512176
|
+44 (0)7808 098724
|
|
|
Media Relations (Yasmin Diamond; Zoe Bird):
|
+44 (0)1895 512008
|
+44 (0)7736 746167
|
|
|
Presentation for Analysts and Shareholders:
A presentation with Richard Solomons, Chief Executive Officer, and Paul Edgecliffe-Johnson, Chief Financial Officer, will commence at 9.30am London time on 5 August at Goldman Sachs, Rivercourt, 120 Fleet Street, London, EC4A 2BE. There will be an opportunity to ask questions. The presentation will conclude at approximately 11.00am.
There will be a live audio webcast of the results presentation on the web address http://www.ihgplc.com/interims14. 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 dial-in facility:
|
|||
|
UK Toll
UK Toll Free
US Toll
US Toll Free
|
+44 (0) 20 3003 2666
0808 109 0700
+1 646 843 4608
+1 866 966 5335
|
||
|
Passcode:
|
IHG
|
||
|
A replay of the 9.30am conference call will be available following the event - details are below:
|
|||
|
UK Toll
|
+44 (0)20 8196 1998
|
||
|
Replay pin
|
8116107
|
||
|
US conference call and Q&A:
There will also be a conference call, primarily for US investors and analysts, at 9.00am New York time on 5 August with Richard Solomons, Chief Executive Officer, and Paul Edgecliffe-Johnson, Chief Financial Officer. There will be an opportunity to ask questions.
|
|||
|
UK Toll
UK Toll Free
US Toll
US Toll Free
|
+44 (0) 20 3003 2666
0808 109 0700
+1 646 843 4608
+1 866 966 5335
|
||
|
Passcode:
|
IHG
|
||
|
A replay of the 9.00am New York time conference call will be available following the event - details are below:
|
|||
|
UK Toll
|
+44 (0)20 8196 1998
|
||
|
Replay pin
|
9754862
|
||
|
Website:
The full release and supplementary data will be available on our website from 7.00am (London time) on 5 August. The web address is http://www.ihgplc.com/interims14.
|
|||
|
Notes to Editors:
IHG (InterContinental Hotels Group) [LON:IHG, NYSE:IHG (ADRs)] is a global organisation with a broad portfolio of nine hotel brands, including InterContinental® Hotels & Resorts, Hotel Indigo®, Crowne Plaza® Hotels & Resorts, Holiday Inn® Hotels & Resorts, Holiday Inn Express®, Staybridge Suites®, Candlewood Suites®, EVEN™ Hotels and HUALUXE® Hotels and Resorts.
IHG manages IHG® Rewards Club, the world's first and largest hotel loyalty programme with over 80 million members worldwide. The programme was relaunched in July 2013, offering enhanced benefits for members including free internet across all hotels, globally.
IHG franchises, leases, manages or owns over 4,700 hotels and 693,000 guest rooms in nearly 100 countries, with almost 1,200 hotels in its development pipeline.
InterContinental Hotels Group PLC is the Group's holding company and is incorporated in Great Britain and registered in England and Wales.
Visit www.ihg.com for hotel information and reservations and www.ihgrewardsclub.com for more on IHG Rewards Club. For our latest news, visit: www.ihg.com/media, www.twitter.com/ihg, www.facebook.com/ihg or www.youtube.com/ihgplc.
|
|||
|
Cautionary note regarding forward-looking statements:
This announcement contains certain forward-looking statements as defined under US law (Section 21E of the Securities Exchange Act of 1934). These forward-looking statements can be identified by the fact that they do not relate 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. 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. Factors that could affect the business and the financial results are described in 'Risk Factors' in the InterContinental Hotels Group PLC Annual report on Form 20-F filed with the United States Securities and Exchange Commission.
|
|||
|
6 months ended 30 June
|
||||
|
Group results
|
2014
|
2013
|
%
|
|
|
$m
|
$m
|
change
|
||
|
Revenue
|
||||
|
Americas
|
435
|
457
|
(4.8)
|
|
|
Europe
|
182
|
206
|
(11.7)
|
|
|
AMEA
|
117
|
102
|
14.7
|
|
|
Greater China
|
112
|
112
|
-
|
|
|
Central
|
62
|
59
|
5.1
|
|
|
____
|
____
|
____
|
||
|
908
|
936
|
(3.0)
|
||
|
____
|
____
|
____
|
||
|
Operating profit
|
||||
|
Americas
|
268
|
282
|
(5.0)
|
|
|
Europe
|
38
|
53
|
(28.3)
|
|
|
AMEA
|
38
|
41
|
(7.3)
|
|
|
Greater China
|
36
|
36
|
-
|
|
|
Central
|
(70)
|
(74)
|
5.4
|
|
|
____
|
____
|
____
|
||
|
Operating profit before exceptional items
|
310
|
338
|
(8.3)
|
|
|
Exceptional operating items
|
106
|
160
|
(33.8)
|
|
|
____
|
____
|
____
|
||
|
416
|
498
|
(16.5)
|
||
|
Net financial expenses
|
(39)
|
(36)
|
(8.3)
|
|
|
____
|
____
|
____
|
||
|
Profit before tax
|
377
|
462
|
(18.4)
|
|
|
____
|
____
|
____
|
||
|
Earnings per ordinary share
|
||||
|
Basic
|
93.0¢
|
127.8¢
|
(27.2)
|
|
|
Adjusted
|
70.7¢
|
78.2¢
|
(9.6)
|
|
|
Average US dollar to sterling exchange rate
|
$1 : £0.60
|
$1 : £0.65
|
(7.7)
|
|
|
6 months ended 30 June
|
|||||
|
Americas Results
|
2014
|
2013
|
%
|
||
|
$m
|
$m
|
change
|
|||
|
Revenue
|
|||||
|
Franchised
|
305
|
278
|
9.7
|
||
|
Managed
|
52
|
79
|
(34.2)
|
||
|
Owned and leased
|
78
|
100
|
(22.0)
|
||
|
____
|
____
|
____
|
|||
|
Total
|
435
|
457
|
(4.8)
|
||
|
____
|
____
|
____
|
|||
|
Operating profit before exceptional items
|
|||||
|
Franchised
|
263
|
245
|
7.3
|
||
|
Managed
|
25
|
52
|
(51.9)
|
||
|
Owned and leased
|
8
|
11
|
(27.3)
|
||
|
____
|
____
|
____
|
|||
|
296
|
308
|
(3.9)
|
|||
|
Regional overheads
|
(28)
|
(26)
|
(7.7)
|
||
|
____
|
____
|
____
|
|||
|
Total
|
268
|
282
|
(5.0)
|
||
|
____
|
____
|
____
|
|||
|
Hotels
|
Rooms
|
||||
|
Americas hotel and room count
|
Change over
|
Change over
|
|||
|
2014
30 June
|
2013
31 December
|
2014
30 June
|
2013
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
51
|
-
|
17,448
|
(5)
|
|
|
Crowne Plaza
|
179
|
3
|
47,926
|
869
|
|
|
Hotel Indigo
|
37
|
-
|
4,343
|
(1)
|
|
|
EVEN Hotels
|
2
|
2
|
296
|
296
|
|
|
Holiday Inn Express
|
2,011
|
26
|
177,386
|
2,955
|
|
|
Holiday Inn*
|
773
|
(13)
|
136,733
|
(2,097)
|
|
|
Staybridge Suites
|
191
|
3
|
20,586
|
277
|
|
|
Candlewood Suites
|
315
|
3
|
30,092
|
314
|
|
|
Other
|
77
|
(4)
|
18,639
|
(583)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
3,636
|
20
|
453,449
|
2,025
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
3,414
|
20
|
410,681
|
1,806
|
|
|
Managed
|
217
|
-
|
41,138
|
991
|
|
|
Owned and leased
|
5
|
-
|
1,630
|
(772)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
3,636
|
20
|
453,449
|
2,025
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
|
* Includes 12 Holiday Inn Club Vacations (4,027 rooms) and 20 Holiday Inn Resort properties (4,870 rooms) (2013 10 Holiday Inn Club Vacations (3,701 rooms) and 18 Holiday Inn Resort properties (4,572 rooms)).
|
|
Hotels
|
Rooms
|
||||
|
Americas pipeline
|
Change over
|
Change over
|
|||
|
2014
30 June
|
2013
31 December
|
2014
30 June
|
2013
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
6
|
-
|
1,437
|
-
|
|
|
Crowne Plaza
|
16
|
-
|
3,156
|
(72)
|
|
|
Hotel Indigo
|
28
|
5
|
3,806
|
688
|
|
|
EVEN Hotels
|
3
|
(2)
|
584
|
(296)
|
|
|
Holiday Inn*
|
140
|
1
|
19,839
|
495
|
|
|
Holiday Inn Express
|
379
|
21
|
36,308
|
2,820
|
|
|
Staybridge Suites
|
79
|
8
|
8,440
|
945
|
|
|
Candlewood Suites
|
85
|
5
|
7,304
|
390
|
|
|
Other
|
13
|
12
|
1,628
|
1,514
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
749
|
50
|
82,502
|
6,484
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
713
|
35
|
75,844
|
3,825
|
|
|
Managed
|
35
|
17
|
6,454
|
2,955
|
|
|
Owned and Leased
|
1
|
(2)
|
204
|
(296)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
749
|
50
|
82,502
|
6,484
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
|
* Includes nil Holiday Inn Club Vacations (nil rooms) and 4 Holiday Inn Resort properties (545 rooms) (2013 1 Holiday Inn Club Vacations (120 rooms) and 6 Holiday Inn Resort properties (792 rooms)).
|
|
6 months ended 30 June
|
|||||
|
Europe results
|
2014
|
2013
|
%
|
||
|
$m
|
$m
|
change
|
|||
|
Revenue
|
|||||
|
Franchised
|
49
|
53
|
(7.5)
|
||
|
Managed
|
81
|
72
|
12.5
|
||
|
Owned and leased
|
52
|
81
|
(35.8)
|
||
|
____
|
____
|
____
|
|||
|
Total
|
182
|
206
|
(11.7)
|
||
|
____
|
____
|
____
|
|||
|
Operating profit before exceptional items
|
|||||
|
Franchised
|
36
|
41
|
(12.2)
|
||
|
Managed
|
15
|
12
|
25.0
|
||
|
Owned and leased
|
2
|
17
|
(88.2)
|
||
|
____
|
____
|
____
|
|||
|
53
|
70
|
(24.3)
|
|||
|
Regional overheads
|
(15)
|
(17)
|
11.8
|
||
|
____
|
____
|
____
|
|||
|
Total
|
38
|
53
|
(28.3)
|
||
|
____
|
____
|
____
|
|||
|
Hotels
|
Rooms
|
||||
|
Europe hotel and room count
|
Change over
|
Change over
|
|||
|
2014
30 June
|
2013
31 December
|
2014
30 June
|
2013
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
30
|
(1)
|
9,390
|
(135)
|
|
|
Crowne Plaza
|
82
|
(1)
|
19,214
|
(308)
|
|
|
Hotel Indigo
|
16
|
3
|
1,511
|
268
|
|
|
Holiday Inn*
|
280
|
(2)
|
45,069
|
(552)
|
|
|
Holiday Inn Express
|
221
|
6
|
26,465
|
1,094
|
|
|
Staybridge Suites
|
5
|
-
|
784
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
634
|
5
|
102,433
|
367
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
534
|
6
|
80,107
|
590
|
|
|
Managed
|
99
|
(1)
|
21,856
|
(223)
|
|
|
Owned and leased
|
1
|
-
|
470
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
634
|
5
|
102,433
|
367
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
|
* Includes 2 Holiday Inn Resort properties (212 rooms) (2013 2 Holiday Inn Resort properties (212 rooms)).
|
|
Hotels
|
Rooms
|
||||
|
Europe pipeline
|
Change over
|
Change over
|
|||
|
2014
30 June
|
2013
31 December
|
2014
30 June
|
2013
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
3
|
1
|
815
|
162
|
|
|
Crowne Plaza
|
10
|
(2)
|
2,083
|
(541)
|
|
|
Hotel Indigo
|
12
|
(3)
|
1,304
|
(272)
|
|
|
Holiday Inn
|
36
|
1
|
6,777
|
165
|
|
|
Holiday Inn Express
|
39
|
(4)
|
5,405
|
(611)
|
|
|
Staybridge Suites
|
3
|
-
|
298
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
103
|
(7)
|
16,682
|
(1,097)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
89
|
(8)
|
12,830
|
(1,289)
|
|
|
Managed
|
14
|
1
|
3,852
|
192
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
103
|
(7)
|
16,682
|
(1,097)
|
|
|
____
|
____
|
______
|
_____
|
||
|
6 months ended 30 June
|
|||||
|
AMEA results
|
2014
|
2013
|
%
|
||
|
$m
|
$m
|
change
|
|||
|
Revenue
|
|||||
|
Franchised
|
8
|
8
|
-
|
||
|
Managed
|
90
|
73
|
23.3
|
||
|
Owned and leased
|
19
|
21
|
(9.5)
|
||
|
____
|
____
|
_____
|
|||
|
Total
|
117
|
102
|
14.7
|
||
|
____
|
____
|
_____
|
|||
|
Operating profit before exceptional items
|
|||||
|
Franchised
|
6
|
6
|
-
|
||
|
Managed
|
42
|
45
|
(6.7)
|
||
|
Owned and leased
|
1
|
1
|
-
|
||
|
____
|
____
|
_____
|
|||
|
49
|
52
|
(5.8)
|
|||
|
Regional overheads
|
(11)
|
(11)
|
-
|
||
|
____
|
____
|
_____
|
|||
|
Total
|
38
|
41
|
(7.3)
|
||
|
____
|
____
|
_____
|
|||
|
Hotels
|
Rooms
|
||||
|
AMEA hotel and room count
|
2014
|
Change
over 2013
|
2014
|
Change
over 2013
|
|
|
30 June
|
31 December
|
30 June
|
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
68
|
1
|
21,587
|
204
|
|
|
Crowne Plaza
|
68
|
1
|
19,293
|
215
|
|
|
Holiday Inn*
|
82
|
1
|
18,949
|
485
|
|
|
Holiday Inn Express
|
19
|
3
|
4,277
|
777
|
|
|
Staybridge Suites
|
3
|
-
|
425
|
-
|
|
|
Other
|
6
|
(4)
|
1,521
|
(467)
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
246
|
2
|
66,052
|
1,214
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
49
|
(2)
|
11,421
|
(190)
|
|
|
Managed
|
195
|
4
|
54,044
|
1,404
|
|
|
Owned and leased
|
2
|
-
|
587
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
246
|
2
|
66,052
|
1,214
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
|
* Includes 13 Holiday Inn Resort properties (2,638 rooms) (2013 13 Holiday Inn Resort properties (2,638 rooms)).
|
|
Hotels
|
Rooms
|
||||
|
AMEA pipeline
|
2014
|
Change
over 2013
|
2014
|
Change
over 2013
|
|
|
30 June
|
31 December
|
30 June
|
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
21
|
-
|
5,408
|
30
|
|
|
Crowne Plaza
|
16
|
2
|
4,412
|
364
|
|
|
Hotel Indigo
|
8
|
-
|
1,402
|
10
|
|
|
Holiday Inn*
|
48
|
(1)
|
12,540
|
199
|
|
|
Holiday Inn Express
|
38
|
(1)
|
7,718
|
(262)
|
|
|
Staybridge Suites
|
6
|
-
|
935
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
137
|
-
|
32,415
|
341
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
3
|
-
|
647
|
-
|
|
|
Managed
|
134
|
-
|
31,768
|
341
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
137
|
-
|
32,415
|
341
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
|
* Includes 5 Holiday Inn Resort properties (1,301 rooms) (2013 5 Holiday Inn Resort properties (1,301 rooms)).
|
|
6 months ended 30 June
|
|||||
|
Greater China results
|
2014
|
2013
|
%
|
||
|
$m
|
$m
|
change
|
|||
|
Revenue
|
|||||
|
Franchised
|
2
|
2
|
-
|
||
|
Managed
|
44
|
41
|
7.3
|
||
|
Owned and leased
|
66
|
69
|
(4.3)
|
||
|
____
|
____
|
____
|
|||
|
Total
|
112
|
112
|
-
|
||
|
____
|
____
|
____
|
|||
|
Operating profit before exceptional items
|
|||||
|
Franchised
|
2
|
2
|
-
|
||
|
Managed
|
25
|
23
|
8.7
|
||
|
Owned and leased
|
19
|
22
|
(13.6)
|
||
|
____
|
____
|
____
|
|||
|
46
|
47
|
(2.1)
|
|||
|
Regional overheads
|
(10)
|
(11)
|
9.1
|
||
|
____
|
____
|
____
|
|||
|
Total
|
36
|
36
|
-
|
||
|
____
|
____
|
____
|
|||
|
Hotels
|
Rooms
|
||||
|
Greater China hotel and room count
|
2014
|
Change
over 2013
|
2014
|
Change
over 2013
|
|
|
30 June
|
31 December
|
30 June
|
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
31
|
2
|
12,482
|
740
|
|
|
Crowne Plaza
|
69
|
4
|
24,559
|
1,325
|
|
|
Hotel Indigo
|
5
|
-
|
612
|
-
|
|
|
Holiday Inn*
|
67
|
-
|
21,684
|
22
|
|
|
Holiday Inn Express
|
44
|
2
|
11,801
|
506
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
216
|
8
|
71,138
|
2,593
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Franchised
|
4
|
-
|
2,184
|
-
|
|
|
Managed
|
211
|
8
|
68,451
|
2,593
|
|
|
Owned and leased
|
1
|
-
|
503
|
-
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
216
|
8
|
71,138
|
2,593
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
|
* Includes 3 Holiday Inn Resort properties (893 rooms) (2013 3 Holiday Inn Resort properties (893 rooms)).
|
|
Hotels
|
Rooms
|
||||
|
Greater China pipeline
|
2014
|
Change
over 2013
|
2014
|
Change
over 2013
|
|
|
30 June
|
31 December
|
30 June
|
31 December
|
||
|
Analysed by brand
|
|||||
|
InterContinental
|
21
|
(1)
|
8,008
|
(1,384)
|
|
|
HUALUXE
|
24
|
3
|
7,654
|
850
|
|
|
Crowne Plaza
|
47
|
(5)
|
16,007
|
(2,462)
|
|
|
Hotel Indigo
|
8
|
3
|
1,346
|
625
|
|
|
Holiday Inn*
|
44
|
3
|
12,706
|
762
|
|
|
Holiday Inn Express
|
42
|
9
|
9,214
|
1,954
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
186
|
12
|
54,935
|
345
|
|
|
____
|
____
|
______
|
_____
|
||
|
Analysed by ownership type
|
|||||
|
Managed
|
186
|
12
|
54,935
|
345
|
|
|
____
|
____
|
______
|
_____
|
||
|
Total
|
186
|
12
|
54,935
|
345
|
|
|
____
|
____
|
______
|
_____
|
||
|
|
|
|
|
* Includes 4 Holiday Inn Resort properties (1,200 rooms) (2013 4 Holiday Inn Resort properties (1,200 rooms)).
|
|
· political and economic developments;
|
|
|
· events that adversely impact domestic or international travel;
|
|
|
· the hotel industry supply and demand cycle;
· a competitive and changing industry;
· the dependency on a wide range of external stakeholders and business partners;
|
|
|
· identifying, securing and retaining franchise and management agreements;
|
|
|
· changing technology and systems;
|
|
|
· the reputation of its brands and the protection of intellectual property rights;
· the reliance upon its proprietary reservations system and is exposed to the risk of failures in the system and increased competition in reservations infrastructure;
· information security and data privacy;
· safety, security and crisis management;
|
|
|
· requiring the right people, skills and capability to manage growth and change;
|
|
|
· compliance with existing and changing regulations across numerous countries, territories and jurisdictions;
|
|
|
· litigation;
· corporate responsibility;
|
|
|
· its financial stability, ability to borrow and satisfy debt covenants; and
|
|
|
· difficulties insuring its business.
|
|
|
· The condensed set of Financial Statements has been prepared in accordance with IAS 34;
|
|
|
· The Interim Management Report includes a fair review of the important events during the first six months, and their impact on the financial statements and a description of the principal risks and uncertainties for the remaining six months of the year, as required by DTR 4.2.7R; and
|
|
|
· The Interim Management Report includes a fair review of related party transactions and changes therein, as required by DTR 4.2.8R.
|
|
6 months ended 30 June 2014
|
6 months ended 30 June 2013
|
||||||
|
Before
exceptional
items
|
Exceptional
items
(note 4)
|
Total
|
Before
exceptional
items
|
Exceptional
items
(note 4)
|
Total
|
||
|
$m
|
$m
|
$m
|
$m
|
$m
|
$m
|
||
|
Continuing operations
|
|||||||
|
Revenue (note 3)
|
908
|
-
|
908
|
936
|
-
|
936
|
|
|
Cost of sales
|
(378)
|
-
|
(378)
|
(377)
|
-
|
(377)
|
|
|
Administrative expenses
|
(180)
|
(24)
|
(204)
|
(182)
|
(13)
|
(195)
|
|
|
Share of profits of associates and joint ventures
|
-
|
-
|
-
|
-
|
7
|
7
|
|
|
Other operating income and expenses
|
6
|
130
|
136
|
1
|
166
|
167
|
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
||
|
356
|
106
|
462
|
378
|
160
|
538
|
||
|
Depreciation and amortisation
|
(46)
|
-
|
(46)
|
(40)
|
-
|
(40)
|
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
||
|
Operating profit (note 3)
|
310
|
106
|
416
|
338
|
160
|
498
|
|
|
Financial income
|
2
|
-
|
2
|
3
|
-
|
3
|
|
|
Financial expenses
|
(41)
|
-
|
(41)
|
(39)
|
-
|
(39)
|
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
||
|
Profit before tax
|
271
|
106
|
377
|
302
|
160
|
462
|
|
|
Tax (note 5)
|
(89)
|
(49)
|
(138)
|
(93)
|
(28)
|
(121)
|
|
|
_____
|
____
|
____
|
_____
|
____
|
____
|
||
|
Profit for the period from continuing operations
|
182
|
57
|
239
|
209
|
132
|
341
|
|
|
====
|
====
|
====
|
====
|
====
|
====
|
||
|
Attributable to:
|
|||||||
|
Equity holders of the parent
|
181
|
57
|
238
|
208
|
132
|
340
|
|
|
Non-controlling interest
|
1
|
-
|
1
|
1
|
-
|
1
|
|
|
____
|
____
|
____
|
____
|
____
|
____
|
||
|
182
|
57
|
239
|
209
|
132
|
341
|
||
|
====
|
====
|
====
|
====
|
====
|
====
|
||
|
Earnings per ordinary share
(note 6)
|
|||||||
|
Continuing and total operations:
|
|||||||
|
Basic
|
93.0¢
|
127.8¢
|
|||||
|
Diluted
|
91.9¢
|
126.4¢
|
|||||
|
Adjusted
|
70.7¢
|
78.2¢
|
|||||
|
Adjusted diluted
|
69.9¢
|
77.3¢
|
|||||
|
====
|
====
|
====
|
====
|
||||
|
2014
6 months ended 30 June
$m
|
2013
6 months ended 30 June
$m
|
||
|
Profit for the period
|
239
|
341
|
|
|
Other comprehensive income
|
|||
|
Items that may be subsequently reclassified to profit or loss:
|
|||
|
Gains on valuation of available-for-sale financial assets, net of related tax charge of $1m (2013 $nil)
|
13
|
14
|
|
|
Exchange losses on retranslation of foreign operations, net of related tax credit of $1m (2013 $2m)
|
(8)
|
(34)
|
|
|
Exchange losses reclassified to profit on hotel disposal
|
-
|
46
|
|
|
____
|
____
|
||
|
5
|
26
|
||
|
Items that will not be reclassified to profit or loss:
|
|||
|
Re-measurement losses on defined benefit plans, net of related tax credit of $3m (2013 tax charge of $10m)
|
(8)
|
(13)
|
|
|
Tax related to pensions contributions
|
-
|
1
|
|
|
____
|
____
|
||
|
(8)
|
(12)
|
||
|
____
|
____
|
||
|
Total other comprehensive (loss)/ income for the period
|
(3)
|
14
|
|
|
____
|
____
|
||
|
Total comprehensive income for the period
|
236
|
355
|
|
|
====
|
====
|
||
|
Attributable to:
|
|||
|
Equity holders of the parent
|
234
|
355
|
|
|
Non-controlling interest
|
2
|
-
|
|
|
____
|
____
|
||
|
236
|
355
|
||
|
====
|
====
|
||
|
6 months ended 30 June 2014
|
|||||
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
At beginning of the period
|
189
|
(2,605)
|
2,334
|
8
|
(74)
|
|
Total comprehensive income for the period
|
-
|
4
|
230
|
2
|
236
|
|
Repurchase of shares
|
-
|
-
|
(110)
|
-
|
(110)
|
|
Movement in shares in employee share trusts
|
-
|
20
|
(59)
|
-
|
(39)
|
|
Equity-settled share-based cost
|
-
|
-
|
14
|
-
|
14
|
|
Tax related to share schemes
|
-
|
-
|
7
|
-
|
7
|
|
Equity dividends paid
|
-
|
-
|
(122)
|
(1)
|
(123)
|
|
Exchange adjustments
|
5
|
(5)
|
-
|
-
|
-
|
|
_____
|
______
|
_____
|
____
|
____
|
|
|
At end of the period
|
194
|
(2,586)
|
2,294
|
9
|
(89)
|
|
=====
|
=====
|
=====
|
====
|
====
|
|
|
6 months ended 30 June 2013
|
|||||
|
Equity share capital
|
Other reserves*
|
Retained earnings
|
Non-controlling interest
|
Total equity
|
|
|
$m
|
$m
|
$m
|
$m
|
$m
|
|
|
At beginning of the period
|
179
|
(2,652)
|
2,781
|
9
|
317
|
|
Total comprehensive income for the period
|
-
|
27
|
328
|
-
|
355
|
|
Issue of ordinary shares
|
4
|
-
|
-
|
-
|
4
|
|
Repurchase of shares
|
-
|
-
|
(137)
|
-
|
(137)
|
|
Movement in shares in employee share trusts
|
-
|
31
|
(60)
|
-
|
(29)
|
|
Equity-settled share-based cost
|
-
|
-
|
13
|
-
|
13
|
|
Tax related to share schemes
|
-
|
-
|
9
|
-
|
9
|
|
Equity dividends paid
|
-
|
-
|
(115)
|
(1)
|
(116)
|
|
Exchange adjustments
|
(11)
|
11
|
-
|
-
|
-
|
|
_____
|
_____
|
____
|
____
|
____
|
|
|
At end of the period
|
172
|
(2,583)
|
2,819
|
8
|
416
|
|
=====
|
=====
|
====
|
====
|
====
|
|
|
*
|
Other reserves comprise the capital redemption reserve, shares held by employee share trusts, other reserves, unrealised gains and losses reserve and currency translation reserve.
|
|
2014
30 June
|
2013
30 June
|
2013
31 December
|
|
|
$m
|
$m
|
$m
|
|
|
ASSETS
|
|||
|
Property, plant and equipment
|
1,089
|
1,079
|
1,169
|
|
Goodwill
|
84
|
83
|
80
|
|
Intangible assets
|
509
|
408
|
438
|
|
Investment in associates and joint ventures
|
115
|
87
|
85
|
|
Retirement benefit assets
|
9
|
78
|
7
|
|
Other financial assets
|
230
|
260
|
236
|
|
Non-current tax receivable
|
15
|
23
|
16
|
|
Deferred tax assets
|
97
|
161
|
108
|
|
_____
|
_____
|
_____
|
|
|
Total non-current assets
|
2,148
|
2,179
|
2,139
|
|
_____
|
_____
|
_____
|
|
|
Inventories
|
3
|
4
|
4
|
|
Trade and other receivables
|
523
|
518
|
423
|
|
Current tax receivable
|
12
|
4
|
12
|
|
Derivative financial instruments
|
5
|
-
|
1
|
|
Other financial assets
|
48
|
5
|
12
|
|
Cash and cash equivalents
|
308
|
396
|
134
|
|
_____
|
_____
|
_____
|
|
|
Total current assets
|
899
|
927
|
586
|
|
Non-current assets classified as held for sale
|
-
|
226
|
228
|
|
______
|
______
|
______
|
|
|
Total assets (note 3)
|
3,047
|
3,332
|
2,953
|
|
=====
|
=====
|
=====
|
|
|
LIABILITIES
|
|||
|
Loans and other borrowings
|
(16)
|
(16)
|
(16)
|
|
Trade and other payables
|
(719)
|
(691)
|
(748)
|
|
Provisions
|
(3)
|
(4)
|
(3)
|
|
Current tax payable
|
(35)
|
(43)
|
(47)
|
|
_____
|
_____
|
_____
|
|
|
Total current liabilities
|
(773)
|
(754)
|
(814)
|
|
_____
|
_____
|
_____
|
|
|
Loans and other borrowings
|
(1,330)
|
(1,206)
|
(1,269)
|
|
Derivative financial instruments
|
-
|
(42)
|
(11)
|
|
Retirement benefit obligations
|
(198)
|
(161)
|
(184)
|
|
Trade and other payables
|
(590)
|
(585)
|
(574)
|
|
Deferred tax liabilities
|
(245)
|
(106)
|
(175)
|
|
_____
|
_____
|
_____
|
|
|
Total non-current liabilities
|
(2,363)
|
(2,100)
|
(2,213)
|
|
Liabilities classified as held for sale
|
-
|
(62)
|
-
|
|
_____
|
_____
|
_____
|
|
|
Total liabilities
|
(3,136)
|
(2,916)
|
(3,027)
|
|
=====
|
=====
|
=====
|
|
|
Net (liabilities)/assets
|
(89)
|
416
|
(74)
|
|
=====
|
=====
|
=====
|
|
|
EQUITY
|
|||
|
Equity share capital
|
194
|
172
|
189
|
|
Capital redemption reserve
|
12
|
11
|
12
|
|
Shares held by employee share trusts
|
(18)
|
(15)
|
(38)
|
|
Other reserves
|
(2,911)
|
(2,892)
|
(2,906)
|
|
Unrealised gains and losses reserve
|
113
|
86
|
100
|
|
Currency translation reserve
|
218
|
227
|
227
|
|
Retained earnings
|
2,294
|
2,819
|
2,334
|
|
______
|
______
|
______
|
|
|
IHG shareholders' equity
|
(98)
|
408
|
(82)
|
|
Non-controlling interest
|
9
|
8
|
8
|
|
______
|
______
|
______
|
|
|
Total equity
|
(89)
|
416
|
(74)
|
|
=====
|
=====
|
=====
|
|
2014
6 months ended
30 June
|
2013
6 months ended
30 June
|
||||
|
$m
|
$m
|
||||
|
Profit for the period
|
239
|
341
|
|||
|
Adjustments for:
|
|||||
|
Net financial expenses
|
39
|
36
|
|||
|
Income tax charge
|
138
|
121
|
|||
|
Depreciation and amortisation
|
46
|
40
|
|||
|
Exceptional operating items
|
(106)
|
(160)
|
|||
|
Equity-settled share-based cost
|
10
|
11
|
|||
|
Other items
|
1
|
2
|
|||
|
_____
|
_____
|
||||
|
Operating cash flow before movements in working capital
|
367
|
391
|
|||
|
Net change in loyalty programme liability and System Fund surplus
|
99
|
99
|
|||
|
Other changes in net working capital
|
(180)
|
(198)
|
|||
|
Utilisation of provisions
|
-
|
2
|
|||
|
Retirement benefit contributions, net of cost
|
(2)
|
(9)
|
|||
|
Cash flows relating to exceptional operating items
|
(9)
|
(9)
|
|||
|
_____
|
_____
|
||||
|
Cash flow from operations
|
275
|
276
|
|||
|
Interest paid
|
(12)
|
(11)
|
|||
|
Interest received
|
1
|
1
|
|||
|
Tax paid on operating activities
|
(59)
|
(40)
|
|||
|
_____
|
_____
|
||||
|
Net cash from operating activities
|
205
|
226
|
|||
|
_____
|
_____
|
||||
|
Cash flow from investing activities
|
|||||
|
Purchase of property, plant and equipment
|
(43)
|
(62)
|
|||
|
Purchase of intangible assets
|
(47)
|
(39)
|
|||
|
Investment in other financial assets
|
-
|
(100)
|
|||
|
Investment in associates and joint ventures
|
(8)
|
(7)
|
|||
|
Disposal of hotel assets, net of costs
|
346
|
462
|
|||
|
Proceeds from other financial assets
|
13
|
16
|
|||
|
Distribution from associate on sale of hotel
|
-
|
17
|
|||
|
Tax paid on disposals
|
-
|
(5)
|
|||
|
_____
|
_____
|
||||
|
Net cash from investing activities
|
261
|
282
|
|||
|
_____
|
_____
|
||||
|
Cash flow from financing activities
|
|||||
|
Proceeds from the issue of share capital
|
-
|
4
|
|||
|
Purchase of own shares
|
(110)
|
(127)
|
|||
|
Purchase of own shares by employee share trusts
|
(49)
|
(32)
|
|||
|
Dividends paid to shareholders
|
(122)
|
(115)
|
|||
|
Dividends paid to non-controlling interests
|
(1)
|
(1)
|
|||
|
Decrease in other borrowings
|
-
|
(1)
|
|||
|
_____
|
_____
|
||||
|
Net cash from financing activities
|
(282)
|
(272)
|
|||
|
_____
|
_____
|
||||
|
Net movement in cash and cash equivalents in the period
|
184
|
236
|
|||
|
Cash and cash equivalents at beginning of the period
|
134
|
195
|
|||
|
Exchange rate effects
|
(10)
|
(35)
|
|||
|
_____
|
_____
|
||||
|
Cash and cash equivalents at end of the period
|
308
|
396
|
|||
|
=====
|
=====
|
||||
|
1.
|
Basis of preparation
|
|
These condensed interim financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority and IAS 34 'Interim Financial Reporting' and have been prepared on a consistent basis using the same accounting policies set out in the InterContinental Hotels Group PLC (the Group or IHG) Annual Report and Form 20-F for the year ended 31 December 2013.
These condensed interim financial statements are unaudited and do not constitute statutory accounts of the Group within the meaning of Section 435 of the Companies Act 2006. The auditors have carried out a review of the financial information in accordance with the guidance contained in ISRE 2410 (UK and Ireland) 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board.
The financial information for the year ended 31 December 2013 has been extracted from the Group's published financial statements for that year which were prepared in accordance with IFRSs as adopted by the European Union and which have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified with no reference to matters to which the auditor drew attention by way of emphasis and no statement under s498(2) or s498(3) of the Companies Act 2006.
|
|
2.
|
Exchange rates
|
|
The results of operations have been translated into US dollars at the average rates of exchange for the period. In the case of sterling, the translation rate is $1= £0.60 (2013 $1=£0.65). In the case of the euro, the translation rate is $1 = €0.73 (2013 $1 = €0.76).
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=£0.59 (2013 30 June $1 = £0.66; 31 December $1 = £0.60). In the case of the euro, the translation rate is $1 = €0.73 (2013 30 June $1 = €0.77; 31 December $1 = €0.73).
|
|
3.
|
Segmental information
|
||
|
Revenue
|
2014
6 months ended
30 June
|
2013
6 months ended
30 June
|
|
|
$m
|
$m
|
||
|
Americas
|
435
|
457
|
|
|
Europe
|
182
|
206
|
|
|
AMEA
|
117
|
102
|
|
|
Greater China
|
112
|
112
|
|
|
Central
|
62
|
59
|
|
|
____
|
____
|
||
|
Total revenue
|
908
|
936
|
|
|
====
|
====
|
||
|
All results relate to continuing operations.
|
|||
|
Profit
|
2014
6 months ended
30 June
$m
|
2013
6 months ended
30 June
$m
|
|
|
Americas
|
268
|
282
|
|
|
Europe
|
38
|
53
|
|
|
AMEA
|
38
|
41
|
|
|
Greater China
|
36
|
36
|
|
|
Central
|
(70)
|
(74)
|
|
|
____
|
____
|
||
|
Reportable segments' operating profit
|
310
|
338
|
|
|
Exceptional operating items (note 4)
|
106
|
160
|
|
|
____
|
____
|
||
|
Operating profit
|
416
|
498
|
|
|
Financial income
|
2
|
3
|
|
|
Financial expenses
|
(41)
|
(39)
|
|
|
____
|
____
|
||
|
Profit before tax
|
377
|
462
|
|
|
====
|
====
|
||
|
All results relate to continuing operations.
|
|||
|
Assets
|
2014
30 June
$m
|
2013
30 June
$m
|
2013
31 December
$m
|
|
|
Americas
|
958
|
1,104
|
1,079
|
|
|
Europe
|
679
|
638
|
654
|
|
|
AMEA
|
264
|
265
|
253
|
|
|
Greater China
|
393
|
383
|
392
|
|
|
Central
|
316
|
358
|
304
|
|
|
____
|
____
|
____
|
||
|
Segment assets
|
2,610
|
2,748
|
2,682
|
|
|
Unallocated assets:
|
||||
|
Non-current tax receivable
|
15
|
23
|
16
|
|
|
Deferred tax assets
|
97
|
161
|
108
|
|
|
Current tax receivable
|
12
|
4
|
12
|
|
|
Derivative financial instruments
|
5
|
-
|
1
|
|
|
Cash and cash equivalents
|
308
|
396
|
134
|
|
|
____
|
____
|
____
|
||
|
Total assets
|
3,047
|
3,332
|
2,953
|
|
|
====
|
====
|
====
|
|
4.
|
Exceptional items
|
||||
|
2014
6 months ended
30 June
$m
|
2013
6 months ended
30 June
$m
|
||||
|
Continuing operations:
|
|||||
|
Exceptional operating items
|
|||||
|
Administrative expenses:
|
|||||
|
Currency loss (a)
|
(14)
|
-
|
|||
|
Restructuring costs (b)
|
(10)
|
-
|
|||
|
Litigation (c)
|
-
|
(10)
|
|||
|
Loyalty programme rebranding costs
|
-
|
(3)
|
|||
|
____
|
____
|
||||
|
(24)
|
(13)
|
||||
|
Share of profits of associates and joint ventures:
|
|||||
|
Share of gain on disposal of a hotel (d)
|
-
|
7
|
|||
|
Other operating income and expenses:
|
|||||
|
Gain on disposal of hotels (e)
|
130
|
166
|
|||
|
____
|
____
|
||||
|
106
|
160
|
||||
|
====
|
====
|
||||
|
Tax
|
|||||
|
Tax on exceptional operating items
|
(49)
|
(10)
|
|||
|
Exceptional tax (f)
|
-
|
(18)
|
|||
|
____
|
____
|
||||
|
(49)
|
(28)
|
||||
|
====
|
====
|
||||
|
These items are treated as exceptional by reason of their size or nature.
|
||
|
a)
|
Relates to foreign exchange losses resulting from recent changes to the Venezuelan currency exchange rate mechanisms and the adoption of the SICAD II exchange rate.
|
|
|
b)
|
Relates to a restructuring of the Group's corporate functions.
|
|
|
c)
|
Related to an agreed settlement in respect of a lawsuit filed against the Group in the Greater China region.
|
|
|
d)
|
Related to the sale of a hotel by an associate in the Americas region.
|
|
|
e)
|
Relates, in 2014, to the sale of the InterContinental Mark Hopkins San Francisco and the disposal of an 80% interest in the InterContinental New York Barclay and, in 2013, to the sale of the InterContinental London Park Lane (see note 7).
|
|
|
f)
|
In 2013 represented, primarily, deferred tax related to the expected repatriation of earnings consequential upon the disposal of the InterContinental London Park Lane.
|
|
|
5.
|
Tax
|
|
The tax charge on profit for the period from continuing operations, excluding the impact of exceptional items (note 4), has been calculated using a tax rate of 33% (2013 31%) analysed as follows.
|
|
2014
|
2014
|
2014
|
2013
|
2013
|
2013
|
||||||
|
6 months ended 30 June
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
Profit
$m
|
Tax
$m
|
Tax
rate
|
|||||
|
Before exceptional items
|
271
|
(89)
|
33%
|
302
|
(93)
|
31%
|
|||||
|
Exceptional items
|
106
|
(49)
|
160
|
(28)
|
|||||||
|
____
|
____
|
____
|
____
|
||||||||
|
377
|
(138)
|
462
|
(121)
|
||||||||
|
====
|
====
|
====
|
====
|
||||||||
|
Analysed as:
|
|||||||||||
|
UK tax
|
(2)
|
(13)
|
|||||||||
|
Foreign tax
|
(136)
|
(108)
|
|||||||||
|
____
|
____
|
||||||||||
|
(138)
|
(121)
|
||||||||||
|
====
|
====
|
||||||||||
|
6.
|
Earnings per ordinary share
|
|
Basic earnings per ordinary share is calculated by dividing the profit for the period available for IHG equity holders by the weighted average number of ordinary shares, excluding investment in own shares, in issue during the period.
Diluted earnings per ordinary share is calculated by adjusting basic earnings per ordinary share to reflect the notional impact of the weighted average number of dilutive ordinary share awards outstanding during the period.
Adjusted earnings per ordinary share is disclosed in order to show performance undistorted by exceptional items, to give a more meaningful comparison of the Group's performance.
|
|
Continuing and total operations
|
2014
6 months ended 30 June
|
2013
6 months
ended 30 June
|
||
|
Basic earnings per ordinary share
|
||||
|
Profit available for equity holders ($m)
|
238
|
340
|
||
|
Basic weighted average number of ordinary shares (millions)
|
256
|
266
|
||
|
Basic earnings per ordinary share (cents)
|
93.0
|
127.8
|
||
|
====
|
====
|
|||
|
Diluted earnings per ordinary share
|
||||
|
Profit available for equity holders ($m)
|
238
|
340
|
||
|
Diluted weighted average number of ordinary shares (millions)
|
259
|
269
|
||
|
Diluted earnings per ordinary share (cents)
|
91.9
|
126.4
|
||
|
====
|
====
|
|||
|
Adjusted earnings per ordinary share
|
||||
|
Profit available for equity holders ($m)
|
238
|
340
|
||
|
Adjusting items (note 4):
|
||||
|
Exceptional operating items ($m)
|
(106)
|
(160)
|
||
|
Tax on exceptional operating items ($m)
|
49
|
10
|
||
|
Exceptional tax ($m)
|
-
|
18
|
||
|
____
|
____
|
|||
|
Adjusted earnings ($m)
|
181
|
208
|
||
|
Basic weighted average number of ordinary shares (millions)
|
256
|
266
|
||
|
Adjusted earnings per ordinary share (cents)
|
70.7
|
78.2
|
||
|
====
|
====
|
|||
|
Diluted weighted average number of ordinary shares (millions)
|
259
|
269
|
||
|
Adjusted diluted earnings per ordinary share (cents)
|
69.9
|
77.3
|
||
|
====
|
====
|
|||
|
The diluted weighted average number of ordinary shares is calculated as:
|
||||||
|
2014
millions
|
2013
millions
|
|||||
|
Basic weighted average number of ordinary shares
|
256
|
266
|
||||
|
Dilutive potential ordinary shares
|
3
|
3
|
||||
|
____
|
____
|
|||||
|
259
|
269
|
|||||
|
====
|
====
|
|||||
|
7.
|
Disposal of hotels
|
|||
|
2014
6 months
ended
30 June
$m
|
2013
6 months
ended
30 June
$m
|
|||
|
Net assets disposed:
|
||||
|
Property, plant and equipment
|
91
|
-
|
||
|
Non-current assets held for sale
|
223
|
294
|
||
|
Net current liabilities
|
(4)
|
(6)
|
||
|
______
|
_____
|
|||
|
310
|
288
|
|||
|
Gain on disposal of hotels
|
130
|
166
|
||
|
Accrued disposal costs
|
5
|
2
|
||
|
Exchange losses recycled from currency translation reserve
|
-
|
46
|
||
|
_____
|
_____
|
|||
|
Total consideration
|
445
|
502
|
||
|
=====
|
====
|
|||
|
Satisfied by:
|
||||
|
Cash consideration, net of costs paid
|
346
|
462
|
||
|
Other financial asset
|
27
|
-
|
||
|
Intangible assets
|
50
|
40
|
||
|
Associate investment
|
22
|
-
|
||
|
_____
|
_____
|
|||
|
445
|
502
|
|||
|
=====
|
====
|
|||
|
8.
|
Dividends and shareholder returns
|
|||||
|
2014
cents per share
|
2013
cents per share
|
2014
$m
|
2013
$m
|
|||
|
Paid during the period:
|
||||||
|
Final (declared for previous year)
|
47.0
|
43.0
|
122
|
115
|
||
|
=====
|
=====
|
====
|
====
|
|||
|
Proposed for the period:
|
||||||
|
Interim
|
25.0
|
23.0
|
59
|
63*
|
||
|
=====
|
=====
|
====
|
====
|
|||
|
*Amount paid
|
||||||
|
Under the $500m share buyback programme announced on 7 August 2012, 3.4m shares were repurchased in the six months to 30 June 2014 for a consideration of $110m, increasing the total amount repurchased to $500m. Of the 3.4m shares repurchased in 2014, 2.7m are held as treasury shares and 0.7m were cancelled. The total number of shares held as treasury shares at 30 June 2014 was 12.5m. The cost of treasury shares has been deducted from retained earnings.
On 2 May 2014, the Group announced a $750m return to shareholders by way of a special dividend and share consolidation. On 30 June 2014, shareholders approved the share consolidation on the basis of 12 new ordinary shares of 15 265/329p per share for every 13 existing ordinary shares of 14 194/329p. The dividend was paid on 14 July 2014.
|
||||||
|
9.
|
Net debt
|
|||
|
2014
30 June
|
2013
30 June
|
2013
31 December
|
||
|
$m
|
$m
|
$m
|
||
|
Cash and cash equivalents
|
308
|
396
|
134
|
|
|
Loans and other borrowings - current
|
(16)
|
(16)
|
(16)
|
|
|
Loans and other borrowings - non-current
|
(1,330)
|
(1,206)
|
(1,269)
|
|
|
Derivatives hedging debt values*
|
7
|
(35)
|
(2)
|
|
|
____
|
____
|
____
|
||
|
Net debt
|
(1,031)
|
(861)
|
(1,153)
|
|
|
====
|
====
|
====
|
||
|
Finance lease liability included above
|
(216)
|
(213)
|
(215)
|
|
|
====
|
====
|
====
|
||
|
*
|
Net debt includes the exchange element of the fair value of currency swaps that fix the value of the Group's £250m 6% bonds. At 30 June 2014, 72% of the value was fixed (2013 30 June 100%; 31 December 100%). An equal and opposite exchange adjustment on the retranslation of the £250m 6% bonds is included in non-current borrowings.
|
|
10.
|
Movement in net debt
|
||||
|
2014
6 months ended
30 June
|
2013
6 months ended
30 June
|
2013
12 months
ended
31 December
|
|||
|
$m
|
$m
|
$m
|
|||
|
Net increase/(decrease) in cash and cash equivalents
|
184
|
236
|
(58)
|
||
|
Add back cash flows in respect of other components of net debt:
|
|||||
|
Decrease in other borrowings
|
-
|
1
|
1
|
||
|
____
|
____
|
____
|
|||
|
Decrease/(increase) in net debt arising from cash flows
|
184
|
237
|
(57)
|
||
|
Non-cash movements:
|
|||||
|
Finance lease liability
|
(2)
|
(2)
|
(3)
|
||
|
Exchange and other adjustments
|
(60)
|
(22)
|
(19)
|
||
|
____
|
____
|
____
|
|||
|
Decrease/(increase) in net debt
|
122
|
213
|
(79)
|
||
|
Net debt at beginning of the period
|
(1,153)
|
(1,074)
|
(1,074)
|
||
|
____
|
____
|
____
|
|||
|
Net debt at end of the period
|
(1,031)
|
(861)
|
(1,153)
|
||
|
====
|
====
|
====
|
|||
|
11.
|
Fair values
|
||||
|
The table below compares carrying amounts and fair values of the Group's financial assets and liabilities at 30 June 2014:
|
|||||
|
2014
30 June
Carrying value
$m
|
2014
30 June
Fair value
$m
|
2013
31 December
Carrying value
$m
|
2013
31 December
Fair value
$m
|
||
|
Financial assets:
|
|||||
|
Equity securities available-for-sale
|
142
|
142
|
136
|
136
|
|
|
Loans and receivables
|
136
|
136
|
112
|
112
|
|
|
Derivatives
|
5
|
5
|
1
|
1
|
|
|
_____
|
_____
|
_____
|
_____
|
||
|
283
|
283
|
249
|
249
|
||
|
=====
|
=====
|
=====
|
=====
|
||
|
Financial liabilities:
|
|||||
|
£250m 6% bonds 2016
|
(438)
|
(466)
|
(412)
|
(461)
|
|
|
£400m 3.875% bonds 2022
|
(688)
|
(686)
|
(654)
|
(650)
|
|
|
Finance lease obligations
|
(216)
|
(246)
|
(215)
|
(233)
|
|
|
Derivatives
|
-
|
-
|
(11)
|
(11)
|
|
|
Other borrowings
|
(4)
|
(4)
|
(4)
|
(4)
|
|
|
_____
|
_____
|
_____
|
_____
|
||
|
(1,346)
|
(1,402)
|
(1,296)
|
(1,359)
|
||
|
=====
|
=====
|
=====
|
=====
|
||
|
Equity securities available-for-sale and derivatives are held in the Group statement of financial position at fair value as set out below. The fair value of loans and receivables approximates book value based on prevailing market rates. The fair value of the £250m and £400m bonds is based on their quoted market price. The fair value of finance lease obligations is calculated by discounting future cash flows at prevailing interest rates. The fair value of other borrowings approximates book value as interest rates reset to market rates on a frequent basis. The following table provides the fair value measurement hierarchy of the above assets and liabilities, other than those with carrying amounts which are reasonable approximations of their fair values.
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
|
|
30 June 2014
|
Level 1
$m
|
Level 2
$m
|
Level 3
$m
|
Total
$m
|
|
|
Assets
|
|||||
|
Equity securities available-for-sale:
|
|||||
|
Quoted equity shares
|
16
|
-
|
-
|
16
|
|
|
Unquoted equity shares
|
-
|
-
|
126
|
126
|
|
|
Derivatives
|
-
|
5
|
-
|
5
|
|
|
31 December 2013
|
Level 1
$m
|
Level 2
$m
|
Level 3
$m
|
Total
$m
|
|
|
Assets
|
|||||
|
Equity securities available-for-sale:
|
|||||
|
Quoted equity shares
|
9
|
-
|
-
|
9
|
|
|
Unquoted equity shares
|
-
|
-
|
127
|
127
|
|
|
Derivatives
|
-
|
1
|
-
|
1
|
|
|
The Level 2 derivatives consist of currency swaps which are valued using data from observable swap curves, adjusted to take account of the Group's own credit risk.
The Level 3 equity securities relate to investments in unlisted shares which are valued either by applying an average price-earnings (P/E) ratio for a competitor group to the earnings generated by the investment, or by reference to share of net assets. The average P/E ratio used for the period was 25.0 and a non-marketability factor of 30% is applied.
A 10% increase in the average P/E ratio would result in a $5m increase in the fair value of the investments and a 10% decrease in the average P/E ratio would result in a $5m decrease in the fair value of the investments. A 10% increase in net assets would result in a $5m increase in the fair value of investments and a 10% decrease in net assets would result in a $5m decrease in the fair value of the investments.
There were no transfers between Level 1 and Level 2 fair value measurements during the period and no transfers into and out of Level 3.
The following table reconciles movements in instruments classified as Level 3 during the period:
|
|||||
|
2014
30 June
$m
|
|||||
|
At 1 January 2014
|
127
|
||||
|
Repaid
|
(8)
|
||||
|
Valuation gains recognised in other comprehensive income
|
7
|
||||
|
____
|
|||||
|
At 30 June 2014
|
126
|
||||
|
====
|
|||||
|
12.
|
Commitments and contingencies
|
|
At 30 June 2014, the amount contracted for but not provided for in the financial statements for expenditure on property, plant and equipment and intangible assets was $128m (2013 31 December $83m; 30 June $63m). The Group has also committed to invest up to $97m in four investments accounted for under the equity method, of which $43m had been spent at 30 June 2014. In addition, the Group has outstanding loan commitments to these equity investments of $27m at 30 June 2014.
At 30 June 2014, the Group had contingent liabilities of $46m (2013 31 December $nil; 30 June $2m), largely related to amendments to management agreement contractual obligations.
In limited cases, the Group may provide performance guarantees to third-party hotel owners to secure management contracts. The maximum unprovided exposure under such guarantees is $51m (2013 31 December $48m; 30 June $47m).
In limited cases, the Group may guarantee bank loans made to facilitate third-party ownership of hotels in which the Group has an equity interest and also a management contract. At 30 June 2014, there were guarantees of $20m in place (2013 31 December $20m; 30 June $20m).
From time to time, the Group is subject to legal proceedings the ultimate outcome of each being always subject to many uncertainties inherent in litigation. In particular, the Group is currently subject to class action law suits in the US. The Group has also given warranties in respect of the disposal of certain of its former subsidiaries. It is the view of the Directors that, other than to the extent that liabilities have been provided for in these financial statements, it is not possible to quantify any loss to which these proceedings or claims under these warranties may give rise, however, as at the date of reporting, the Group does not believe that the outcome of these matters will have a material effect on the Group's financial position.
|
|
|
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 2014 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 12. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) , 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union.
Our Responsibility
Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of half-yearly financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2014 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.
Ernst & Young LLP
London
4 August 2014
|
|
InterContinental Hotels Group PLC
|
||
|
(Registrant)
|
||
|
By:
|
/s/ H. Patel
|
|
|
Name:
|
H. PATEL
|
|
|
Title:
|
COMPANY SECRETARIAL OFFICER
|
|
|
Date:
|
05 August 2014
|
|