InterContinental Hotels (IHG) made 2013 a year for spring cleaning. The group has been moving to a more capital-light model, offloading properties and focusing on hotel management and fee-based business instead. It flogged hotels in New York and London last year, reporting gross proceeds of $830m (£497m), and announced the $120m sale of another - the InterContinental Mark Hopkins hotel in San Francisco - alongside these results.
But the group warned that capital expenditure on new projects could still peak at $350m this year, eating into last year's net sale proceeds of $444m. Last year played host to 237 new openings, with 444 hotels added to the group's pipeline - the highest number for five years. The ambitious expansion and refurbishment plans will leave little scope for additional returns to shareholders in the coming year; as a result, speculation over another special dividend has cooled.
The US federal government shut-down, a fickle food and beverage market and slower macroeconomic conditions in China weighed on progress in 2013. The group beat operating profit expectations, delivering $668m ahead of the consensus forecast of $658m, but the shares nonetheless fell 4 per cent on the announcement.
Analysts at broker Numis Securities expect adjusted pre-tax profits of $598m this year, giving EPS of 163ȼ (up marginally from 156ȼ in 2013).
INTERCONTINENTAL HOTELS (IHG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,976p | MARKET VALUE: | £5.1bn | |
| TOUCH: | 1,975-1,976p | 12-MONTH HIGH: | 2,047p | LOW: 1,653p |
| DIVIDEND YIELD: | 2.2%* | PE RATIO: | 23 | |
| NET ASSET VALUE: | ** | NET DEBT: | $1.2bn | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
|---|---|---|---|---|
| 2009 | 1.54 | -64 | 73 | 41.4 |
| 2010 | 1.63 | 397 | 101 | 48.0 |
| 2011 | 1.77 | 532 | 159 | 55.0 |
| 2012 | 1.84 | 547 | 187 | 64.0 |
| 2013 | 1.90 | 600 | 141 | 70.0* |
| % change | +3 | +10 | -25 | +9 |
Ex-div: 19 Mar Payment: 9 May *Not including 2013 special dividend of 133ȼ a share **Negative shareholders' funds £1=$1.66 | ||||
