IHG reports "solid revenue growth" in half-year results

InterContinental Hotels Group (IHG) reports "solid" revenue growth driven by both revpar and rooms in its half-year results to 30 June 2017.

During the first six months of 2017, revenue increased by 2.3% to £657m ($857m) and operating profit increased 8% to £281m ($366m). Profit before tax increased by £21m ($28m) to £250m ($326m).

Global revpar increased by 2.1% in the first half of the year, led by occupancy, up 0.9%. In Europe comparable revpar increased 6.2%, driven equally by rate and occupancy, and UK revpar increased by 6.7%, with strong trading in both London (9%) and the provinces (5.4%).

Keith Barr, chief executive of InterContinental Hotels Group, said: "I feel privileged to be the new CEO of IHG and to have the opportunity to build on the strong performance we have delivered. My focus is on driving an acceleration in our growth rate, by increasing the resources dedicated behind the highest opportunity markets and segments, strengthening our brand portfolio, building on our leading loyalty proposition, and enhancing our competitive advantage through prioritising digital and technological innovation.

“We will continue to focus on enhancing our cost efficiency to generate funds for reinvestment. This, combined with our cash-generative business model and disciplined approach to capital allocation, will drive superior returns to shareholders. While we will always face macro-economic and geopolitical uncertainties, we remain confident in the outlook for 2017."

Ben Flint, a market analyst at City Index, added: "The dividend is up a pleasing 10%, reinforcing the company's reputation as a solid yield play. InterContinental Hotels has either raised or held its ordinary dividend steady for more than a decade now and there's little sign of management changing tack, despite some of its main competitors directing their cash to big acquisitions.

"Strong revenue growth in Europe is encouraging, though a more subdued performance in the US has dragged down group-wide revenue growth compared to the previous quarter. Although the company pinned the fall on the timing of Easter, the relatively weaker US performance may stoke some unease, given fears the Trump administration's immigration policies could discourage inbound tourism."

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