Holiday Inn 2013 Annual Report Download - page 6

In last year’s Annual Report, I shared my
perspective and initial impressions of
IHG.I have not been disappointed. I have
continued to be deeply impressed by the
skills, dedication and energy of our people,
our award-winning brand portfolio and
our relentless focus on delivering our
strategy. On behalf of the Board, I would
therefore like to extend my sincere thanks
to our 350,000 colleagues around the
world who have strived to put our guests
at the heart of everything they do with
pride anddedication.
Responsible Business
Being a responsible business is an integral
part of delivering on our strategy. It is not
only reflected in our culture, but also in
ourapproach to governance and doing
theright thing. Our commitment to serve
the local communities in which we
operateisstronger than ever and we
recently launched stretching Corporate
Responsibility (CR) targets to reflect this.
You can find more information on our CR
programmes and targets on page 32.
A robust and effective system of internal
controls and risk management processes
is an essential part of IHG’s governance
structure and a key part of being a
responsible business. More detail on our
approach to risk management can be found
on pages 34 to 37.
Shareholder returns and
financialposition
IHG has an excellent track record of
delivering sustainable and attractive
returns for shareholders. Last year we
announced a $350 million special dividend,
which was paid alongside the ordinary
interim dividend on 4 October 2013. Wealso
bought back $283 million of shares in the
year, in addition to the $107 million bought
back in 2012, leaving $110 million of our
existing $500 million share buyback
programme to complete. Once complete,
total funds returned to shareholders since
our 2003 demerger, excluding ordinary
dividends, will amount to $8.0 billion.
I am also pleased to announce that the Board
is recommending a 9 per cent increase to the
final dividend for 2013 resulting in a full-year
dividend of 70 cents (43.2 pence) per share,
up 9 per centon 2012.
We continue to honour our commitment
tomaintaining an efficient balance sheet
whilst retaining an investment grade credit
rating through the cycle. This approach has
delivered significant value for investors.
Over the three-year period to 31 December
2013, IHG’s annualised total shareholder
return (TSR) was 22 per cent, compared
with 9 per cent for the FTSE 100 as a whole.
Board
I have been impressed by the strength
and diversity of the IHG Board. We have a
very strong balance of skills, knowledge,
experience and diversity among our
Directors. Critical to the success of the
business is ensuring we maintain this
breadth and balance of skills to suit both
the existing shape of the business and to
support our future growth. We have, for
example, recognised that consumer facing
technology will continue to be an important
part of our business and that we need to
strengthen ourselves accordingly. We have
therefore taken the decision to look to
further enhance the Board by appointing an
additional Non-Executive Director with
strong experience in this area. Equally
important, is ensuring the Board has
absolutely the right processes in place to
ensure it is operating as efficiently and
effectively as possible, and is helping to set
the agenda for the business to succeed both
in the short and long term. This will continue
to be a priority in 2014 and beyond.
Reflecting these commitments, this year,
we announced a number changes to
theBoard.
“ We are delighted to have
delivered another year
of strong performance
in 2013, my first year
asChairman of IHG.”
2013 was another strong year for IHG. Despite what
continued to be challenging macroeconomic conditions
around the world, we delivered on our strategy and
reported good growth in our operating profit and
earnings per share.
Total full-year dividend
(sterling equivalent of 43.2p)
Revenue per available room*
686,873 rooms (4,697 hotels)
operating in the IHG System
Fee revenue†
Driven by 3.8% of RevPAR growth
and 1.6% net IHG System size growth
+9%: 70.0¢
+3.8%
+4%
*
Total IHG System rooms revenue divided
by the number of room nights available.
†
Group revenue excluding owned and leased
hotels, managed leases and significant liquidated
damages. Growth stated at constant currency.
4 IHG Annual Report and Form 20-F 2013
Chairman’s statement