InterContinental Hotels (IHG) sealed 2014 by upping its final dividend by 10 per cent to 77ȼ a share. That might sound generous (it equates to more than $1bn in shareholder returns), but the group would be hard-pressed to repeat its 2013 special dividend, as the recent $430m Kimpton acquisition pushed net debt up by a third.
Last year, global revenue per available room (RevPAR) grew by 6.1 per cent, driven by 7.4 per cent RevPAR growth in the Americas. And at constant currency, operating profits rose 10 per cent to $648m. But management warned that 2015 would be dogged by "many macroeconomic and geopolitical instabilities". Last year, the group suffered a double-digit decline in RevPAR in Thailand as political instability kept tourists away.
Meanwhile, the company is shifting towards a less capital-intensive structure. Property disposals accounted for the 2 per cent dip in group revenues last year, but the group received $346m in cash proceeds from the sale of InterContinental Mark Hopkins San Francisco and a majority share in the InterContinental New York Barclay.
Analysts at Numis expect pre-tax profit of $622m this year, giving EPS of 184ȼ. This is up from $600m and 158ȼ, respectively.
| INTERCONTINENTAL HOTELS (IHG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,489p | MARKET VALUE: | £5.88bn | |
| TOUCH: | 2,489-2,490p | 12-MONTH HIGH: | 2,775p | LOW: 1,854p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 24 | |
| NET ASSET VALUE: | * | NET DEBT: | $1.53bn | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (ȼ) | Dividend per share (ȼ) |
|---|---|---|---|---|
| 2010 | 1.6 | 397.0 | 101.0 | 48.0 |
| 2011 | 1.8 | 532.0 | 159.0 | 55.0 |
| 2012 | 1.8 | 547.0 | 187.0 | 64.0 |
| 2013 | 1.9 | 600.0 | 140.9 | 70.0 |
| 2014 | 1.9 | 600.0 | 158.3 | 77.0 |
| % change | -2 | - | +12 | +10 |
Ex-div: 2 Apr Payment: 15 May £1=$1.54. *Negative shareholders' funds, including intangible assets of $643m, or 272ȼ a share. | ||||
