InterContinental Hotels (IHG) is adding to its development pipeline at a record pace. Around 46,000 rooms were approved for development during the first half, which chief executive Keith Barr called the “best performance for a decade”. It's particularly impressive, as chief financial officer Paul Edgecliffe-Johnson says high global demand for hotels doesn't always equate to new rooms. It follows 83,000 rooms added during 2017, with the latest additions bringing the total pipeline number to 262,000.
More than a third of these 46,000 rooms will open in Greater China, marking a regional increase of 71 per cent year on year. Revenue per available room in China rose 10.1 per cent during the first half, compared with 9.3 per cent the same time last year. That helped drive a 25 per cent regional sales increase, while operating profit rose by a third. Mr Edgecliffe-Johnson said the Chinese government is keen to support tourism, which makes the hotel sector a clear focus for growth.
Analysts at Numis expect pre-tax profit of $724m (£559m) during 2018, giving EPS of 293¢, compared with $673m and 245¢ in 2017.
| INTERCONTINENTAL HOTELS (IHG) | ||||
| ORD PRICE: | 4,691p | MARKET VALUE: | £8.95bn | |
| TOUCH: | 4,691-4,693p | 12-MONTH HIGH: | 5,050p | LOW: 3,656p |
| DIVIDEND YIELD: | 1.8% | PE RATIO: | 20 | |
| NET ASSET VALUE: | * | NET DEBT: | $1.8bn | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2017 | 1.96 | 357 | 127 | 33.0 |
| 2018 | 2.11 | 303 | 123 | 36.3 |
| % change | +8 | -15 | -3 | +10 |
| Ex-div: | 30 Aug | |||
| Payment: | 5 Oct | |||
| *Negative shareholders' funds, includes intangible assets of $989m, or 518¢ a share £1=$1.30 | ||||
