Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on INTERCONTINENTAL HOTELS GROU. We currently have 15 research reports from 3 professional analysts.
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INTERCONTINENTAL HOTELS GROU
INTERCONTINENTAL HOTELS GROU
Still a slow-growing RevPAR
26 Oct 16
IHG published 1.3% RevPAR growth lfl in Q3 after +1.5% in Q1 and +2% in Q2. The Americas (which accounted for 58% of sales in 2015) continued with the trend with 1.9% RevPAR growth penalised by IHG’s exposure to oil markets. In this context, the group continues to invest in its Loyalty Programme (“Your Rate”) and in its network with 19,000 rooms added to its pipeline (230,000 rooms, 14% share of the global industry pipeline).
Panmure Morning Note 21-10-2016
21 Oct 16
IHG has reported its Q3 trading update showing slowing global RevPAR growth of +1.3% in the quarter. This is a slowdown from 2.5% in 2Q and +4.8% last year. Net system size grew 3.8% (versus 4.3% last year or 2.7% ex Kimpton). We do not expect to make changes to our forecasts ahead of the conference call this morning with the acceleration in room growth compensating for RevPAR slowdown. While the ‘fee-based’ business model makes IHG less operationally geared than other asset heavy hotel companies, the medium term outlook for the industry is deteriorating, with consumer confidence and security concerns weighing on corporate/leisure travel spending. As such, we struggle to see any upcoming catalysts (absent a bid or further $/£ movement) for further share price appreciation. With the stock trading on 2016E PE of 21.2x and EV/EBITDA of 12.5x we rate the stock HOLD.
A solid H1 performance
04 Aug 16
In H1 16, IHG posted a 2% rise in RevPAR lfl (vs 1.5% in Q1 15), still impacted by oil markets in the US (RevPAR -6.3% in Q2 16 in this market) and weakness in Paris (RevPAR-19.5%), the Middle East (RevPAR -8%) and Hong Kong and Macau (RevPAR -5% and -12% respectively). Prices were up by 1.4% (+1% in Q1 16) and occupancy by 0.4pts at a high level for example in US (70%). Underlying operating profit rose by 10% with a great performance in the Americas (profit +6% and operating margin at 63.9% vs 62.6% in Q1 15) thanks to savings in US healthcare costs and the favourable phasing of franchise costs, which offset the reduction in the other regions.
03 Aug 16
London equities will be today positioning themselves ahead of tomorrow’s declarations from the Bank of England. Traders expect it to cut interest rates for the first time since the financial crisis, while also lowering its UK growth forecasts by the biggest margin on record in response to the uncertainty caused by the Brexit vote. The MPC held off making a decision in the immediate post-vote period in order to collect more economic data and gauge international response, but Governor Mark Carney’s subsequent cautions suggest this year’s growth forecast could be cut from the 2.3% predicted in May’s inflation report to a figure as low as just 1%. A Reuters poll suggests City expectations broadly anticipate a 25bp cut, lowering the base rate from 0.5% where it has remained since March 2009. By contrast, expectations of a rate hike in the US, probably of a similar amount, are now increasingly anticipated, with the Fed’s Dennis Lockhart pointing in this direction during a CNBC interview yesterday which, along with oil prices reaching a fresh 3-month low ahead of the release of weekly inventory data, helped drag all principal indices into the red, with the NASDAQ finally succumbing to profit taking after recent gains. A cloud also remained over Asian equities, with investors becoming pessimistic following release of Japan’s stimulus package details in which the cabinet approved, as leaked by the Wall Street Journal, just Y7.5tr in new spending. Considered inadequate to stimulate its tired economy, the Yen strengthened as the Nikkei fell back and dragged the Hang Seng, which was also responding to Markit reports of slower expansion in China’s service sector during July, with it while the ASX remained unwilling to celebrate yesterday’s interest rate cut in Australia focussing instead on low activity levels and prices across its minerals-dominated sectors. Today expect Service Sector PMI data from the UK along with Eurozone retail activity, followed by Services PMI, unemployment and weekly petroleum status data from the US. Amongst UK corporates, expect half-year results from Aggreko (AGK.L), HSBC (HSBA.L), Moneysupermarket (MONY.L), Next (NXT.L)and Standard Chartered (STAN.L), along with monthly traffic stats from Ryanair (RYA.L). The FTSE 100 is expected to open around 9 points firmer in early trade .
Interim results; small beat and confident outlook
02 Aug 16
Revenues $838m (consensus $859m) with adjusted op profit of $345m (consensus $337m) to give EPS of 89.4c and DPS of 30.0c. RevPAR improved in Q2 to 2.5% (from 1.5% in Q1) smoothing out the Easter distortion. However, some markets are seeing subdued trading, particularly in oil related US markets, Middle East, London and Paris. 3.6% net new room growth with 17k openings (+8.0% YoY) is strong. Regionally Americas saw RevPAR growth of 2.4% (rate driven), Europe RevPAR 2.0%, within which London and Paris remain weak. AMEA RevPAR -0.4% with weakness in Middle East mitigating strong trading elsewhere. Overall Group fee margin was 48.6%, an improvement of 2.9%pts helped by cost phase and scale benefits with tight control of overheads. We do not anticipate making any significant changes to forecasts at this stage. With the stock trading on 2016E PE of 21.0x and EV/EBITDA of 12.5x we rate the stock HOLD.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
05 Dec 16
These interims show LPEs by is ahead of its plan to recruit 360 LPEs by April 2017 and is making impressive progress in Australia. The statement (and we expect the results presentation) provide considerable evidence of Purplebricks’ progress in building its brand, increasing its LPE footprint, developing its technology, creating engaging marketing and selling properties. We leave our forecasts unchanged. Investor confidence in Purplebricks’ ability to deliver sustainable profitable growth should result in share price appreciation towards a valuation based on its results for the year ended April 2019.
Successfully engaging players
06 Dec 16
Stride has a clear focus on online bingo and soft gaming and is growing rapidly, with FY16 l-f-l revenue up 22%. The acquisitions of Tarco and 8Ball at the end of FY16 doubled its share of the UK bingo-led market from 5% to 10% and should deliver material synergies from FY17. Our unchanged FY17 estimates are for 11% EPS growth and strong cash generation. We expect organic growth to be augmented by further accretive acquisitions in due course. Stride’s FY17 P/E is 10.3x and the calendarised EV/EBITDA is only 7.1x, implying considerable share price upside potential.
Small Cap Breakfast
07 Dec 16
Creo Medical group—Schedule 1 update.. £20m raise. Expected market cap £61.2m, admission expected 9 December. ECSC—Schedule 1 from provider of cyber security services. Raising £5m. Vendor sale £0.8m. Target date 14 Dec. Expected market cap £15m. RM Secured Direct Lending - The secured direct lending fund intends to float on the Main Market on 15 December raising up to £100m
Conviction List Q4 2016
05 Oct 16
Since its inception in 2010, the Conviction List has outperformed the market in 13 of 18 periods and a reinvested Conviction List would have returned 255% against a Small Companies index that would have returned 130%. Our Conviction List returned 3.7% over the last quarter; this was set against the benchmark UK Small Companies index that returned 11.3% over the same period. Our Q4 portfolio reflects our outlook for a temporary sweet spot for UK growth during the second half of 2016. The downside risk from the uncertainty of the EU Referendum result has been countered by stimulus from the Bank of England, signs of a looser fiscal stance and an 18% YoY reduction in the Sterling Exchange Rate. Compressed corporate fixed income spreads continue to provide a valuation underpin for global equities.