Takeover rumours have whipped up a bit of froth in the shares of InterContinental Hotels (IHG) recently, and this strong set of first-half results sent them up another 3 per cent. Price rises enabled the owner of the Crowne Plaza and Holiday Inn hotel chains to post a 5.1 per cent increase in revenue per available room, sending underlying operating profits up by 10 per cent to $329m (£211m).
There were about 41,000 room signings in the first half - the most since 2008 - and the business also has a record number of rooms under construction. Robust demand in the Americas, the group's largest market, drove underlying revenues up 10 per cent and profits up 8 per cent there. But the $430m purchase of boutique hotel group Kimpton pushed net debt up 12 per cent to $1.71bn over the six months.
Management says the positive momentum behind the business, including $4bn in annual revenues from its digital platform and a pipeline of 200 hotels in Greater China, gave it leeway to raise the dividend by 10 per cent.
InterContinental also completed its disposal programme with the sale of InterContinental Paris Le Grand for €330m (£231m) and an agreement to sell InterContinental Hong Kong for $938m. It has garnered $8bn in gross proceeds from the asset sales.
Analysts at Numis expect pre-tax profits of $622m this financial year, giving adjusted EPS of 184¢, up from $600m and 158¢ in 2014.
| INTERCONTINENTAL HOTELS | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,606p | MARKET VALUE: | £6.2bn | |
| TOUCH: | 2,605-2,607p | 12-MONTH HIGH: | 2,967p | LOW: 2,085p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 18 | |
| NET ASSET VALUE: | * | NET DEBT: | $1.7bn | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2014 | 908 | 377 | 93 | 25.0 |
| 2015 | 915 | 458 | 156 | 27.5 |
| % change | +1 | +21 | +68 | +10 |
Ex-div: 27 Aug Payment: 2 Oct £1=$1.56 *Negative shareholders' funds | ||||
