InterContinental Hotel’s (IHG) business in Greater China was hit by unrest in Hong Kong in 2019, with revenue in the region down 5.6 per cent. Revenue per available room (RevPAR) was down 0.3 per cent globally, which the group attributed to unrest in the Middle East, trade disputes between Japan and South Korea, and weaker UK corporate demand.
The group’s statement did not give any official guidance on the impact of the coronavirus outbreak on the business, but management said in an analyst call that it is having some impact, as travel and occupancy rates are experiencing some decline. But chief executive Keith Barr said that the group remains committed to the long-term market opportunity in the country, and remains “very very bullish on China”. Indeed, 169 of its franchise hotels are signed into the pipeline in the region.
Elsewhere, its EMEAA (Europe Middle East Africa and Asia) business signed a record high 29,000 rooms into the pipeline and overall IHG opened 65,220 rooms during 2019. Operating profit, excluding the group’s system fund (which is used as a not-for-profit pool for marketing), was up 4 per cent to $865m (£665m), although a 1.8 per cent decline in Q4 RevPAR, though ostensibly linked to the Hong Kong protests, could prefigure a wider slump in the region.
Goldman Sachs forecasts EPS of 320¢ for 2020, up from 305¢ in 2019.
| INTERCONTINENTAL HOTELS GROUP (IHG) | ||||
| ORD PRICE: | 4,821p | MARKET VALUE: | £8.77bn | |
| TOUCH: | 4,816-4,821p | 12-MONTH HIGH: | 5,770p | LOW: 4,483p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 30 | |
| NET ASSET VALUE: | * | NET DEBT: | $2.67bn | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
| 2015 | 1.80 | 1.41 | 520 | 85 |
| 2016 | 1.72 | 0.59 | 195 | 94 |
| 2017 | 4.08 | 0.66 | 280 | 104 |
| 2018** | 4.34 | 0.49 | 184 | 114.4 |
| 2019 | 4.63 | 0.54 | 210 | 125.8 |
| % change | +7 | +10 | +14 | +10 |
| Ex-div: | 2 Apr | |||
| Payment: | 14 May | |||
| *Negative shareholders' funds, including $1.376bn of intangible assets, or 756¢ a share **Restated | ||||
