Holiday Inn 2008 Annual Report Download - page 4

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Dear shareholder
PERFORMANCE
Our continuing revenue increased 5 per cent to $1.9 billion, with continuing operating
profit before exceptional items of $535 million, up 13 per cent. Adjusted continuing
earnings per share increased 26 per cent from 93.8 cents to 117.8 cents. We had a
$132 million exceptional charge in the year. This consisted of $35 million in relation
to the Holiday Inn relaunch; $19 million of cost savings-related severance charges;
$96 million of non-cash asset impairments, reflecting the poorer trading environment
expected in 2009; and other items including gains on asset sales, which netted to an
$18 million credit.
The Board is recommending that the final dividend for 2008 is maintained at 29.2 cents
per share, taking the full-year dividend to 41.4 cents per share, up 2 per cent on 2007.
This converts to a sterling full-year dividend of 26.6 pence, up 29 per cent over 2007.
REPORTING CURRENCY
We changed the reporting currency of our Group accounts from sterling to US dollars
with our 2008 half-year results. This means we can reflect better the Group’s profile
of revenues and operating profits which are largely US dollar-based. Dividends are now
determined in US dollars and converted into sterling immediately before announcement.
BOARD AND EXECUTIVE COMMITTEE
Stevan Porter 1954–2008
We were all deeply saddened by the loss of Steve Porter,
a Board member and President of the Americas, who passed
away in August 2008 after a short illness. Under Steve’s inspired
leadership the Americas region has been established as a
dominant force. He is greatly missed.
We must thank Richard Solomons, Finance Director, for taking on the additional
role of leading the Americas region when Steve became seriously ill in July. Richard
did an outstanding job, ensuring a smooth transition to Jim Abrahamson, who was
appointed as our new President of the Americas in January this year. Jim joined IHG
from Global Hyatt Corporation, where he was Head of Development, The Americas.
Two of our Non-Executive Directors, Sir David Prosser and Robert Larson, retired
from the Board in May and December 2008, respectively. I thank them for their
excellent service and contribution. George Turner became Company Secretary in
January 2009, taking over from Richard Winter who retires in April 2009. I thank
Richard for his service over the past 15 years and wish him well for the future.
FINANCIAL POSITION AND SHAREHOLDER RETURNS
We continue with our prudent approach to managing our balance sheet. We
successfully refinanced our debt facilities in May 2008, and have lowered our
overall net debt position by $400 million to $1.3 billion. During the year, we
continued with our existing share buyback programme, taking the total funds
returned since March 2004 to more than £3.5 billion. We have deferred the
remaining £30 million of the buyback programme in order to preserve cash
and maintain the strength of our balance sheet.
OUTLOOK
Our solid performance in 2008 can be attributed to the exceptional efforts of
all our people. Trading will undoubtedly be tough in 2009, but our strong balance
sheet, resilient business model, great brands and excellent management team,
led by Andy Cosslett, give me continued confidence in the future for the Group.
David Webster
Chairman
2IHGAnnual Report and Financial Statements 2008
Chairman’s statement
“2008 was a good
year for IHG.
We grew both
sales and profits,*
outperforming the
industry in all our
major markets,
and we have
been preparing
the business
for a tougher
environment
in 2009.”
* Before exceptional items.