1、SIX CONTINENTS PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2002ANNUAL REPORT AND FINANCIAL STATEMENTS SIX CONTINENTS PLC20 North Audley StreetLondon W1K 6WNT +44 (0) 20 7409 1919F +44 (0) 20 7409 SIX CONTINENTS HOTELS20 North Audley StreetLondon W1K 6WNT +44 (0) 20 7409 1919F +44 (0) 20 7409 SIX CONT
2、INENTS RETAIL27 Fleet StreetBirmingham B3 1JPT +44 (0) 870 609 3000*F +44 (0) 121 233 *With effect from 13 January 2003BRITVIC SOFT DRINKSBritvic House, Broomfield RoadChelmsford, Essex CM1 1TUT +44 (0) 1245 261 871F +44 (0) 1245 267 SIX CONTINENTS 200201 FINANCIAL HIGHLIGHTS02 OPERATING AND FINANCI
3、AL REVIEW14 DIRECTORS REPORT25 ACCOUNTS 60 GLOSSARYSix Continents is a leading global hospitality group,with over 3,300 hotels acrossnearly100 countries andterritories and with over 2,100 restaurants, pubs and bars in the UK and Germany.Six Continents also has acontrolling interest in Britvic,a lead
4、ing UK producer of soft drinks.1OPERATING PROFIT:SIX CONTINENTS HOTELS DOWN 38.6 PER CENT TO 262m*SIX CONTINENTS RETAIL UP 5.1 PER CENT TO 288m*SOFT DRINKS UP 10.5 PER CENT TO 63mPROFIT BEFORE TAX AND MAJOR EXCEPTIONAL ITEMS DOWN 23.7 PER CENT TO 558mEARNINGS PER SHARE WERE 53.0p COMPARED TO 51.3p*I
5、N 2001ADJUSTED EARNINGS PER SHARE BEFORE MAJOR EXCEPTIONAL ITEMSWERE 42.4p COMPARED TO 56.2p*IN 2001DIVIDEND PER SHARE UP 2.9 PER CENT TO 35.3p*Before major operating exceptional items.*Ongoing estate.*Restated for FRS 19, the new accounting standard for deferred tax.TURNOVER (m)continuing operation
6、s3,7754,03300013,61502DIVIDEND PER SHARE (p)33.334.3000135.302OPERATING CASH FLOW (m) continuing operations32876000120702PROFIT BEFORE TAX (m) (and majorexceptional items)756731000155802FINANCIALHIGHLIGHTSOPERATING PROFIT (m)continuing operations(before majorexceptional items)776792000161802ADJUSTED
7、 EARNINGS PER SHARE* (p) 58.456.2000142.4022OPERATING AND FINANCIAL REVIEWOPERATING AND FINANCIAL REVIEWSIX CONTINENTS 2002This operating and financial review (OFR) provides a commentary on the performanceof the Six Continents Group for the financial year ended 30 September 2002, andcompares it with
8、 the financial year ended 30 September 2001. It reviews theperformance and activities of each of the Group s principal businesses and explainsother aspects of the Group s activities including taxation, treasury management andaccounting policies.The glossary on page 60 defines a number of terms used
9、either in the OFR or in thefinancial statements.The OFR should be read in conjunction with the Directors Report on pages 14 to 24and the financial statements on pages 26 to 55.20022001GROUPmmChangeTurnover3,6154,033-10.4%Operating profit before major exceptional items618792-22.0%Exceptional items:Ma
10、jor(24)(41)Minor(2)Profit before tax (and major exceptional items)558731-23.7%Profit before tax534690-22.6%Basic earnings per share53.0p51.3p*3.3%Adjusted earnings per share42.4p56.2p*-24.6%Net capital expenditure(513)(868)Operating cash flow207116Normal cash flow(290)(397)Net (acquisitions)/disposa
11、ls(15)(129)Net cash flow(305)(526)* As restated for FRS 19 Deferred Tax , which has been adopted for the first time in thisannual report. This change in accounting policy has been accounted for as a prior yearadjustment and previously reported figures have been restated accordingly, see page 30 Acco
12、unting Policies .GROUP SUMMARYOperating profit from continuing operations (before major exceptionalitems) down by 22%Trading for the Group in the year to 30 September 2002 was in line withexpectations given the continued difficult trading conditions experienced in the global hotels market. Six Conti
13、nents Hotels (SCH) continued to make both capital and revenue investment to ensure that it is well placed to gainmaximum benefit from an upturn in the market. The ongoing estate in SixContinents Retail (SCR) achieved good operating profit growth, gained marketshare, and despite significant regulator
14、y cost increases was able to defend itsoperating margins. The soft drinks business had another very successful year,and increased both its market share and operating profit.During the year ended 30 September 2002, Group turnover from continuingoperations of 3,615m fell by 10.4% on the previous year.
15、 Turnover in SCHdecreased 19.2% to 1,532m in 2002. Turnover in SCR from the ongoing estateof 1,475m was 5.7% ahead of last year due to good sales growth in food,wine, soft drinks and accommodation. Soft Drinks turnover of 602m was up5.4% on last year.Operating profit from continuing operations and b
16、efore major exceptional items was 618m against 792m in 2001. SCH operating profit before majorexceptional items was 262m, down 165m against 2001. SCR operating profitfrom the ongoing estate at 288m was up 5.1% on last year. Soft Drinks had a very successful year with operating profit growth of over
17、10%.The exceptional items before tax of 24m included an operating exceptionalitem of 77m and non-operating exceptional items totalling 53m, see Exceptional items below. These operating and non-operating exceptional itemshave been excluded from the calculation of adjusted earnings per share.Profit be
18、fore tax was 534m compared with 690m in 2001; excluding majorexceptional items, profit before tax was 558m against 731m in the previousyear. The taxation charge includes an exceptional credit of 114m in respect of the release of over provisions for tax in respect of prior years, a charge of 10m in r
19、elation to property disposals and a credit of 1m in relation toseparation costs. Excluding the impact of the major exceptional items, the tax3SIX CONTINENTS 2002charge represented an effective rate of 30%, compared with 30.4%* for 2001.Basic earnings per share was 53.0p compared to 51.3p* for 2001.
20、Adjustedearnings per share, which exclude the effect of the major exceptional itemswere 42.4p against 56.2p* in 2001. A final dividend of 24.6p per share has been recommended by the Board giving a total dividend for the year of 35.3p,up 2.9% on 2001.The Group operating cash inflow of 207m was 91m gr
21、eater than 2001. Thisincrease was due to the reduced level of net capital expenditure for the Group scontinuing operations which reduced to 513m from last year s level of 868m.After taking account of interest, dividend and tax payments, normal cashoutflow was 290m compared with 397m in 2001. Net deb
22、t at the end of theyear amounted to 1,177m, resulting in a balance sheet gearing ratio of 22%.SIX CONTINENTS HOTELSOperating profit (before major exceptional items) down by 38.6%STRATEGYDuring the year, Six Continents Hotels (SCH) continued to invest in itsbusinesses and position itself for an uptur
23、n in trading, whilst taking significantaction to protect profit. In order to drive turnover growth, marketing campaignssuch as the reshaping of the InterContinental brand were coupled with investmentin the sales force, reservations systems and e-commerce. Operating costs withinthe owned and leased (
24、O&L) and managed hotel estates, together with corporatecosts, were reviewed as part of stringent cost management programmes.Marketing programmes focused on the key strengths in the InterContinental and Holiday Inn brands. In September 2002, the InterContinental brandreshaping project was announced.
25、This represents a $25m investment inmarketing, advertising and enhancements in service and delivery, the majorityof expenditure being planned to be spent in the first half of 2003. The HolidayInn brand celebrated its 50th anniversary in August 2002 and significant mediacoverage, particularly in the
26、US, ensured that brand awareness was maximised.In the UK, marketing expenditure focused on the expanded Holiday Inn brandpresence following last year s acquisition of the Posthouse hotel chain. Sixtyseven of the Posthouse hotels acquired have now been rebranded as Holiday Inns, bringing the UK O&L H
27、oliday Inn estate to 76 properties.* Restated for FRS 19.20022001HOTELSmmChangeTurnover1,5321,896-19.2%Operating profit before major exceptional items262427-38.6%Net capital expenditure(259)(607)Operating cash flow60(80)Major acquisitions(20)(752)20022001$m$mChangeTurnover2,2622,726-17.0%Operating p
28、rofit before majorexceptional items:Americas:Owned and leased2378-70.5%Managed and upscale franchise4143-4.7%Midscale franchise 200224-10.7%Total Americas264345-23.5%EMEA184290-36.6%Asia Pacific362638.5%Other:FelCor and other1133-66.7%Central services(96)(68)-41.2%Goodwill amortisation(12)(13)7.7%To
29、tal Other(97)(48) -102.1%Total387613-36.9%4OPERATING AND FINANCIAL REVIEWSIX CONTINENTS 2002SCALEThe total SCH system size stood at 3,325 hotels (515,525 rooms) at 30 September 2002, up from 3,267 hotels (514,696 rooms) at the start of the year. In the Americas, the expansion of Holiday Inn Express
30、continued withanother 88 properties (all franchised) added in the year. The extended-staybrand, Staybridge Suites, also continued its expansion, with 11 hotels added in the year. Two more hotels have opened since the year end, making StaybridgeSuites the first up-market extended-stay hotel brand to
31、reach 50 hotels in under four years.Future system growth, indicated by the pipeline of hotels waiting to enter theSCH system, remained strong despite industry difficulties. At 30 September2002 the pipeline stood at 479 hotels, with 64,362 rooms of which 24% were in the upscale brands. The events of
32、11 September 2001 and the generalworld economic conditions have led to uncertainty over the short and mediumterm for hotel development, particularly in the US. SCH has however,maintained its share of supply, and the strength of SCH s brands places it in a strong position to capitalise on any system
33、distribution opportunities as they arise.RESERVATION SYSTEMS AND E-BUSINESSInvestment in global reservation systems continued to yield benefits in 2002.During the year, SCH migrated booking for the InterContinental brand to theHolidexPlus system. It is estimated that SCH s reservation systems delive
34、redaround 30% of Americas midscale room nights sold, while internet bookingsgrew by 80% over the previous year to 4.5 million room nights.SCH s guest frequency programme, Priority Club Rewards (PCR), was relaunchedin 2002 and expanded its membership to nearly 15 million members. Thestrength and impo
35、rtance of PCR was demonstrated by the fact that 29% ofroom nights in the Americas were sold to PCR members.PERFORMANCESCH s turnover decreased by 17.0% from $2,726m in 2001 to $2,262m in 2002.Turnover comparisons to last year are distorted by two non-comparable items.First, the conversion of the Bri
36、stol hotels from operating leases to managementcontracts, effective in the main from 1 July 2001, and second, the inclusion of12 months of turnover from the Posthouse business compared with six monthsin 2001. On a comparable basis, turnover fell by 5.2%.Operating profit before major operating except
37、ional items fell to $387m against$613m in 2001. In sterling terms, operating profit was 262m against 427mlast year, a fall of 38.6%. The weighted average US dollar exchange rate tosterling for the year was $1.48 against $1.44 for 2001, which was marginallydetrimental to the Group when the SCH result
38、 was converted into sterling.FIGURE 1HotelsRoomsTOTAL SYSTEM SIZEChangeChangeAT 30 SEPTEMBER 2002over 20012002over 2001Analysed by brand:InterContinental135-244,545-826Crowne Plaza1912955,9358,609Holiday Inn1,567-20293,346-4,364Holiday Inn Express*1,35298109,2058,212Staybridge Suites48115,4351,201Ot
39、her brands32-587,059-12,003Total3,32558515,525829Analysed by ownership type:Owned and leased190-142,642111Franchised2,82163386,122-150Management contract314-486,761868Total3,32558515,525829-600204060-40-20NORTH AMERICA INTERCONTINENTAL O&L MONTHLY RevPAR 2002percentage change over previous year Six
40、Continents HotelsMarket Segment*Oct2001NovDecJan2002FebMarAprMayJunJulAugSep-20-50510-15-10NORTH AMERICA HOLIDAY INN FRANCHISE MONTHLY RevPAR 2002percentage change over previous year Six Continents HotelsMarket Segment*Oct2001NovDecJan2002FebMarAprMayJunJulAugSep* Operates as Express by Holiday Inn
41、in EMEA region.* Source: Smith Travel Research, US Market Data.FIGURE 2FIGURE 35SIX CONTINENTS 2002SCH s operating profit was affected by both the economic slowdown in the USand the 11 September 2001 terrorist actions. The operating mix of the varyingbusiness models (O&L, management contract and fra
42、nchise) demonstratedsome resilience to the difficult trading conditions, with the franchise andmanagement contract income streams being less affected by the downturn thanthe O&L business. In the Americas, drive versus fly became a key factor in theface of reduced air travel, particularly in the firs
43、t half of the year. The O&Lestate saw a significant fall in operating profit, whilst the midscale franchisebusiness operating profit was less affected. Upscale markets in major US citiessuffered due to their dependence upon domestic and international airline travel,whereas the drive to midscale segm
44、ent (where SCH s franchise business isfocused on Holiday Inn and Holiday Inn Express) performed better.The decline in international travel also impacted Europe, the Middle East andAfrica (EMEA), and in particular those key air travel gateway cities where SCH supscale hotel properties are concentrate
45、d: London, Paris and Amsterdam. AsiaPacific was also adversely affected by the reduction in international travel.AMERICASThe Americas system size grew by 81 hotels and 6,435 rooms to 2,604 hotelswith 373,322 rooms at the end of the year. The increase in the Holiday InnExpress franchise system more t
46、han offset a reduction in Holiday Inn rooms.Total Americas operating profit was $264m compared with $345m in 2001,a 23% decline.The Americas region was the hardest hit by the events of 11 September 2001.Revenue per available room (RevPAR) for the first six months fell by 23% forInterContinental, 21%
47、 for Crowne Plaza, 12.8% for Holiday Inn, 3.7% forHoliday Inn Express and 11.2% for Staybridge Suites. The remainder of the yearsaw an improvement in RevPAR, and resulted in RevPAR for the full year beingdown 15.0% on last year for InterContinental, 14.7% for Crowne Plaza, 7.8% forHoliday Inn, only
48、1.7% for Holiday Inn Express and 2.5% for Staybridge Suites.Performance of the SCH O&L estate in the Americas is heavily dependent uponprofits from the upscale hotel properties in key cities. For the full year, RevPARfor the nine comparable O&L InterContinental hotels was down 12.7% on lastyear, wit
49、h occupancy 0.2 percentage points higher and average daily rates13.0% lower. The refurbishments of the New York, Chicago, Miami and SanFrancisco InterContinental hotels were completed in the year, and this, coupledwith the operational gearing of the O&L hotels, means that these hotels shoulddemonstr
50、ate strong profit growth when revenue growth returns.Crowne Plaza s O&L hotels were impacted principally by the reduction inbusiness meeting and conference travel, driven by general weakness in theeconomy. As a result, Crowne Plaza O&L RevPAR fell by 13.8% for the year.Overall, the Americas O&L busi
