Updates from InterContinental Hotels, Meggitt and Inmarsat

BA shares fall heavily though better news for InterContinental Hotels with operating profit up 6%


Little movement for the FTSE 100 on Monday, down just 1.6 point to 6,677.5. But there was some extreme volatility for individual players: Intertek soared 6.83% to 173p while BA owner IAG lost 3.31% to 327p. Hargreaves Lansdown gave away 2.11% to 995p.

The Dow Jones managed to gain some ground on the last week's heavy losses, climbing almost 76 points to 16,569.2 helped by better numbers from Berkshire Hathaway.

We commence with half year numbers from InterContinental Hotels. Operating profit climbs 6% on an underlying basis to $301m though down 8% on a reported basis. There's global comparable RevPAR growth of 5.8% (rate up 2.3%).

First half trading was particularly strong in the UK, up 8.7%, with high single digit growth in both London and the provinces, while Germany delivered RevPAR up 3.1%.

"Openings," says boss Richard Solomons, "included the first two EVEN Hotels in the US, a major milestone for this new brand, which satisfies a previously unmet guest need in the wellness segment."

Next, Meggitt. It's "strong orders in a challenging market" for the defence player: revenues are down up 11% to £718.9m on a reported basis while operating profit plunges 22% to £151.4m. Earnings per share slides 23% to 14p.

The reduced operating margin is from unusually high second-half revenue weighting and unfavourable mix generally says Meggitt. The interim dividend is upped by 8%.

"Order growth of 9%, including 17% growth in civil aftermarket orders," says chief exec Stephen Young, "gives us confidence in a good second half organic revenue and margin recovery, although currency will remain a drag."

Finally, Inmarsat. The satellite communications player sees total revenues of $652.3m, up 1.9% (2013: $640.3m). Profit before tax is cut to $168.3m (2013: $185.5m) while adjusted total revenues slip to $605.2m (2013: $635.2m).

There's an interim dividend of 18.68 cents, up 5%. "The overall trading environment," says the company, "for our L-band and other business lines remains positive, except in our US Government business unit where, as previously stated, trading remains difficult."

Inmarsat recently had its Hold rating reaffirmed by Berenberg Bank; Société Générale has restated their sell rating.

InterContinental Hotels

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