InterContinental Hotels has posted a 27 percent rise in first quarter operating profits, helped by buoyant market conditions over the last few months and last year’s restructuring.
The group, which has sold off the bulk of its freehold hotel assets as part of a drive to become a hotel management and franchised hotel operator, said continuing operating profit for the three months to March 2006 was 42 mln pounds sterling, up 27 percent.
Continuing revenue was up 22% from £153m to £186m, up 14% at constant exchange rates.
Continuing operating profit up 40% from £30m to £42m, up 27% at constant exchange rates.
Total operating profit, including discontinued operations, of £46m.
Franchised operating profit up 25% to £55m. Managed operating profit up 36% to £19m.
Adjusted earnings per share up 13% from 6.8p to 7.7p.
Total gross revenue from all hotels in IHG’s system up 9% to $3.4bn.
Global constant currency RevPAR growth of 11.6%. Strongest growth in Americas, up 13.0%, with continued rate increases.
Room count steady at 537,544 rooms. Pipeline up by 8,452 to 116,964.
Commenting on the results and trading, Andrew Cosslett, Chief Executive of InterContinental Hotels Group PLC said:
“Results for the quarter were strong, helped by buoyant market conditions around the world and the impact of actions taken during the second half of 2005. These changes included strengthened and refocused development teams, new operating structures and revisions to our marketing approach in key locations. The disposal programme is on track, we remain focused on enhancing the quality of our estate and our pipeline of new hotel signings, the largest in the industry, continues to grow. The outlook for the rest of the year remains positive.”
Americas: strong performance across all brands
RevPAR increased 13.0% with rate generating most of the increase, up 8.4%. InterContinental, Holiday Inn and Candlewood each outperformed their market segments, with RevPAR up 14.5%, 12.5% and 13.0% respectively. Holiday Inn Express, Crowne Plaza and Staybridge Suites also showed continued good RevPAR growth, with 13.8%, 11.9% and 8.6% increases respectively.
Operating profit performance
Operating profit from continuing operations increased 25% from $69m to $86m. Continuing owned and leased profit improved from $2m to $4m, driven by increased rates at InterContinental New York and InterContinental Buckhead, Atlanta, but impacted by pre opening costs at InterContinental Boston. Managed profit was up 38% to $11m, benefiting from retained management contracts on assets disposed. Franchised profit increased 13% to $85m. Including discontinued operations, total operating profit increased from $84m to $87m.