InterContinental First-Half Profit Jumps on Americas GainDalia Fahmy
InterContinental Hotels Group Plc, the world’s largest provider of hotel accommodation, said first-half profit rose 20 percent and that it boosted its dividend after revenue in the Americas region increased. The shares rose the most in a year.
Operating profit before exceptional items and tax climbed to $338 million from $281 million a year earlier, the Denham, England-based company said in a statement today. The company said it will pay a special dividend totaling $350 million and increase the interim dividend by 10 percent to 23 cents a share.
“Our high-quality pipeline, broad geographic spread and fee-based model give us confidence in the outlook, despite the ongoing challenging economic conditions in some of our markets,” Chief Executive Officer Richard Solomons said in the statement.
The owner of the Holiday Inn and Crowne Plaza brands is benefiting from growing demand for accommodation in the Americas, which account for about half of the company’s sales. Revenue in the region rose 14 percent to $457 million. Group revenue increased 7 percent to $936 million.
InterContinental rose as much as 6.9 percent to 2,039 pence in London trading, the most in a year, making it the best performer on the FTSE-100 index, which fell as much as 0.8 percent. The shares have gained 18 percent this year, giving the company a market value of about 5.3 billion pounds ($8.2 billion).
Net income climbed to $340 million, or 126.4 cents a share, from $271 million, or 91.9 cents, a year earlier. Revenue per available room, an industry measure of occupancy and sales, rose 3.7 percent globally, the company said. Revpar in the Americas rose 4.5 percent, compared with a gain of 0.4 percent in Europe and a 0.1 percent drop in Greater China.
InterContinental is trying to sell its New York Barclay hotel, which it began marketing in May, as the company focuses on managing hotels instead of owning them.
“This is a particularly challenging asset to sell because it is in need of a major renovation,” Chief Financial Officer Thomas Singer said on a call with reporters. “We estimate a new purchaser will have to invest in excess of $100 million.”
InterContinental in March said it agreed to sell its London Park Lane Hotel to investors from the Middle East for 301.5 million pounds. At the time, the company said it had sold 191 hotels for $6.1 billion since becoming an independent company in 2003.