IHG RevPar growth eases in Q3, Harland & Wolff wins £61m contract

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The FTSE 100 was called to open 22 points lower at 7,477.

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International hotels group IHG reported a big slowdown in RevPAR - a key performance measure used in the hospitality industry - in the third quarter as growth softened across all regions, but said it still expects a "very strong financial performance" this year.

Group RevPAR was up 10.5% year-on-year in the third quarter, with Americas growing 4.1%, EMEAA increasing 15.9% and Greater China rising 43.2% In the first half, overall RevPAR growth came in at 24%, with Americas up 11%, EMEAA up 42% and Greater China up 94%.

Nevertheless, the company pointed out that RevPAR (or revenue per available room) in the Greater China region is now back above pre-Covid levels in 2019 - something that the Americas achieved in the second quarter of last year and Europe, Middle East, Africa & Asia in the fourth quarter.

Harland & Wolff, the AIM-listed infrastructure and physical asset lifecycle management firm, announced that it has won a £61m contract award from Canadian natural gas company Cenovus Energy.

The UK company, which provides services like fabrication, construction and decommissioning of equipment in the maritime and offshore industries, will be providing Cenovus with mid-life upgrade services to its SeaRose Floating Production Storage and Offloading vessel.

Newspaper round-up

Many more councils in England are at risk of bankruptcy, town hall leaders have warned, as unprecedented financial pressures force local authorities to prepare drastic cuts to services to cope with a collective £4bn deficit. The bleak message, set out in a letter to the chancellor, Jeremy Hunt, said council budgets were “under pressure like never before” because of the rapid deterioration in their finances caused by inflation and soaring demand for social care. – Guardian

Rail workers at English train operating companies have voted overwhelming for another six months of potential strikes, the RMT union announced. More than 20,000 union members were balloted across the 14 companies contracted to the Department for Transport, with 90% voting to give the union a continued mandate for strikes, on a 64% turnout. – Guardian

The Government’s financial watchdog has admitted it made “genuine errors” in its economic forecasts as it underestimated the inflation shock from Covid and the war in Ukraine. The Office for Budget Responsibility (OBR) said its forecasts in March 2021 and March 2022 missed a large part of the spike in prices and the subsequent state support schemes, which led to ramifications for its predictions of tax revenues, spending and interest rates. – Telegraph

M&G plans to close its main UK property fund, citing the waning popularity of open-ended funds among “mom and pop” investors. The 25 buildings left in the M&G Property Portfolio, last valued at £565 million, will be sold off over the next 18 months, with the proceeds being returned to investors. While the fund is being wound down, M&G will cut its fees by 30 per cent. – The Times

Blackstone fell short of expectations in the third quarter amid a decline in profits from asset sales and amid investors’ caution over committing money to private equity funds. The alternative asset manager said that its net profit from the sale of assets had fallen by 36 per cent to $259.4 million in the three months to the end of September. – The Times

US close

US stocks dropped into the red on Thursday as 10-year bond yields closed in on the 5% mark on the back of comments from Federal Reserve chair Jerome Powell, who indicated that monetary policy would likely remain restrictive for some time yet.

Ongoing geopolitical tensions in Israel were also continuing to weigh on sentiment, as seen by gold prices rising a further 1% to $1.986 an ounce on safe-haven demand as investors reduced their appetite for risk.

After struggling for direction for most of the morning, markets fell into negative territory after Powell's remarks, with the Dow finishing 0.8% lower, the S&P 500 falling 0.9% and the Nasdaq dropping 1%.