InterContinental Hotels to Return $1 Billion to Shareholders
LONDON -- InterContinental Hotels Group (ISE: IHG.L) (NYS: IHG) , which counts Crowne Plaza and Holiday Inn among its nine hotel brands, reported a 6% increase in half-year profits this morning, up to $286 million from $269 million in 2011. The group saw double-digit revenue growth in both its European and Greater China operations, with its franchise business driving a 9% increase in operating profits within the Americas division.
Since its demerger from Six Continents during 2003, InterContinental has established a strong track record of returning cash to shareholders, and has announced plans to return a further $1 billion via a $500 million special dividend during Q4 2012, and a $500 million share-buyback program, which will start at the same time. The planned return of funds is driven by the anticipated proceeds from the sale of the InterContinental New York Barclay hotel.
Richard Solomons, chief executive, said:
Our brands continue to perform well and we have achieved solid underlying margin growth, resulting in increased profits and strong cash flows. We are increasing the interim dividend by 31% to reflect these results, our previously stated intention to rebalance the interim and final dividend payments, and our confidence in the future prospects of the business.
While the global economic environment remains uncertain, IHG continues to trade well and we are confident that our strategy will deliver high-quality growth into the future.
With InterContinental's London-traded shares up 5% to 17 pounds in early trading, this morning's news underlines how well-run companies can become rewarding investments for ordinary investors.
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