IHG sees 4% increase in revenues, encouraged by trading

5th Aug 2014 09:04

Intercontinental Hotels Group saw revenues decrease by 3% to reach $908m (£538.33m), while operating profits declined 8% to $310m (£183.8m) as a result of the disposal of two hotels. The company, where activist investor Marcato Capital Management is looking to push for a strategic review to enhance shareholder value, had been expected to generate $307m in net profits according to consensus estimates. For the group as a whole, revenue per available room (RevPAR) was 5.8% ahead at the interim stage, led by a 6.7% gain in the Americas. Underlying revenues however were 4% higher at $788m while operating profits rose by 6%. The company unveiled a 9% increase in its interim dividend to 25 cents per share. Gross system revenues grew 7% to reach $11.1bn (£6.58bn) at constant exchange rates. Net debt worsened to $1.03bn from $861m in the year ago period after the payment of a $750m special dividend. Commenting on the outlook chief executive Richard Solomons said: "whilst several of our key markets continue to experience some political or economic uncertainty, we are encouraged by current trading trends." The company further added that it remains committed to reducing the asset intensity of the business, with good progress having been made with the strategic review of its remaining owned hotels.During the period in question InterContinental sold its Mark Hopkins San Francisco hotel and an 80% interest in the InterContinental New York Barclay. As of 08:29 shares of Intercontinental Hotels Group were 2.16% lower at 2,314p. AB