InterContinental Hotels Group Plc (IHG,IHG.L) Tuesday reported a higher profit for full-year 2012, reflecting continued growth in net rooms, with favorable supply and demand dynamics. The company said, despite the challenging economic environment, it is positioned for further good performance in 2013.
For the full year, revenue per available room or RevPAR, a performance metric in the hotel industry, grew 5.2 percent, compared to a 6.2 percent growth a year earlier, with an average daily rate increase of 3.2 percent and occupancy rising 1.2 percentage points from last year.
In the Americas, RevPAR growth was 6.1 percent, and in Europe, it increased 1.7 percent. In Asia, Middle East and Africa or AMEA, RevPAR rose 4.9 percent from last year and in Greater China the increase was 5.4 percent. The results also benefited from system size growth of 2.7 percent year-on-year to 675,982 rooms, the company added.
For the fourth quarter, global RevPAR growth was 3.9 percent, with a 2.5 percent rise in rate. Fee revenue for the year improved to 6.8 percent from 5.7 percent in the preceding year. Fee-based margins were 42.6 percent, up 2 percentage points from the prior year.
Group operating profit margin was 42.6 percent, up 2 percentage points on 2011.
Richard Solomons, chief executive of the company said, "2012 was another year of significant progress for IHG with our preferred brands driving RevPAR up 5.2%, led by the US up 6.3%. Together with 2.7% net rooms growth, which is fuelled increasingly by our expansion in developing markets, this drove up fee revenues by an impressive 6.8%."
Announcing its preliminary results for the year 2012, the company said its profit before tax increased to $556 million from $532 million in the previous year. Before exceptional items, pre-tax profit was $560 million, up from $497 million a year ago.
On a per share basis, earnings rose to 186.3 cents, from 155.4 cents per share a year earlier. Adjusted earnings, excluding items, were 139 cents, while the company posted 127.4 cents per share in 2011. Annual revenues grew 3.8 percent to $1.84 billion.
The board has also proposed a final dividend of 43 cents per share or 27.7 pence per share. With the interim dividend of 21 cents, the full-year dividend for 2012 will total 64 cents, an increase of 16 percent over 2011.
IHG.L is currently trading at 1,941 pence, down 48 pence or 2.41 percent, on a volume of 283,937 shares.
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