InterContinental Hotels Group profits are up after offloading establishments
London - AFP
InterContinental Hotels Group on Tuesday announced a surge in annual net profits after offloading establishments in Paris and Hong Kong, while a solid underlying performance resulted in large dividend payouts.
Profit after tax more than trebled to $1.22 billion (1.11 billion euros) in 2015 compared with $391 million one year earlier, IHG said in an earnings statement.
The owner of the Crowne Plaza and Holiday Inn brands last year sold two large hotels, InterContinental's Le Grand and InterContinental Hong Kong.
As a result of lower room space, group revenue fell 3.0 percent to $1.8 billion in 2015.
But global revenue per available room (RevPAR) -- a key industry measure -- rose by 4.4 percent, driven by growth in Europe that helped to offset stable demand at IHG hotels in China.
"Looking into the medium term, despite economic and political uncertainty in some markets, the prospects for the hotel industry remain good and the strength of our business model gives us the confidence to propose a 10 percent increase in total dividend for the year," said IHG chief executive Richard Solomons.
IHG also proposed an exceptional dividend of $1.5 billion thanks to its 2015 performance.
The company's shares jumped 4.0 percent to 2,553 pence in early deals on London's FTSE 100 index, which was down 0.5 percent overall.
"Intercontinental Hotels Group has now sold the last of its major owned hotels, to become an almost pure-play hotel management and franchising company," noted Steve Clayton, head of equity research at stockbrokers Hargreaves Lansdown.
"IHG is collecting revenues from the hotels, in one form or another, without tying up capital by actually owning the properties."
InterContinental Hotels Group agreed back in 2014 to sell its Le Grand hotel in Paris to Qatari group Constellation for 330 million euros but is continuing to manage its day-to-day operations.