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New IHG Chief Executive announces solid growth in half year results

InterContinental Hotels Group PLC (IHG) has reported Half Year Results to 30 June 2017 showing solid revenue growth driven by both RevPAR and rooms.

Global comparable H1 RevPAR grew by 2.1%, led by occupancy up 0.9%. Q2 RevPAR was up by 1.5%, including a decline of -0.4% in the US, adversely impacted by the timing of Easter.

The group saw 3.7% net room uplift year-on-year, with 23k room openings, up 31% year on year, which includes 3.5k rooms in Makkah, Saudi Arabia, signed in 2015.

UK RevPAR increased by 6.7%, with strong trading in both London (9.0%) and the provinces (5.4%). The firm opened Hotel Indigo in London’s Leicester Square.

IHG has signed 32k rooms into the pipeline, taking the total to 230k rooms. Forty-five percent of the pipeline currently under construction.

Keith Barr, the new Chief Executive, (pictured) said, “We have had a good first half. RevPAR growth of 2.1% and net system size growth of 3.7% delivered a 7% increase in underlying operating profit and a 27% increase in underlying EPS, underpinning the Board’s decision to increase the interim dividend by 10%.

'We continue to make good progress in executing our well-established strategy to deliver high quality sustainable growth, and during the half we passed the landmark of over 1 million open or pipeline rooms.

'In June, we announced a new, midscale brand to address a $20 billion underserved segment in the US. We believe this will become another brand of scale for IHG that will deliver superior returns to our owners.'

Barr continued, 'Other highlights include the continued roll-out of new design formats across our Holiday Inn Brand Family and the ongoing repositioning of Crowne Plaza. Leveraging our technological capabilities, we are on track to begin roll out of our next generation cloud-based Guest Reservation System in late 2017.

'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.'

Barr finished, '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.”