The weak oil price and global terrorism threat created some lumps in the mattress over at Holiday Inn owner InterContinental Hotels Group (IHG). Group revenue per available room (RevPAR) - a key metric for such businesses - rose 2 per cent in the six months to end-June, led by a 1.4 per cent rise in room rates. But each geographical division had its issue. The largest, the Americas, saw RevPAR rise 2.4 per cent for the half, but this was held back by a 6.3 per cent drop in the same metric during the second quarter due to the region's exposure to oil-producing markets. Chief financial officer Paul Edgecliffe-Johnson said 14 per cent of IHG's US-based rooms are exposed to that sector, compared with 11 per cent on average for the industry.
In Europe, RevPAR rose 2 per cent, but a near-20 per cent RevPAR drop in Paris mitigated the strength of trading across the French and UK provinces as terrorist atrocities blighted city tourism activity. RevPAR across Greater China also rose, but weak patches included Hong Kong and Macau, down 5 per cent and 12 per cent, respectively.
Analysts at Numis expect pre-tax profits of $602m and EPS of 176¢ for the year to December 2016, up from $593m and 175¢ in 2015.
| INTERCONTINENTAL HOTELS GROUP (IHG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,047p | MARKET VALUE: | £6.02bn | |
| TOUCH: | 3,044-3,047p | 12-MONTH HIGH: | 3,080p | LOW: 2,173p |
| DIVIDEND YIELD: | 2.2% | PE RATIO: | 9 | |
| NET ASSET VALUE: | * | NET DEBT: | $1.83bn | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2015 | 915.00 | 458 | 156 | 27.50 |
| 2016 | 838.00 | 298 | 88 | 30.00 |
| % change | -8 | -35 | -44 | +9 |
Ex-div: 1 Sep Payment: 7 Oct *Negative shareholder funds £1=$1.32 | ||||
