INTERCONTINENTAL Hotels Group said yesterday it would return $350m to shareholders via a special dividend as it posted a big rise in first-half profits on the back of strong US demand.
The company behind the Holiday Inn and Crowne Plaza brands said operating profit rose 20 per cent to $338m (£220m) for the six months to 30 June while revenue rose seven per cent to $936m.
Global revenue per available room (RevPAR), a key industry measure, was up 3.7 per cent, driven by higher rates and demand in the Americas, which account for nearly half of IHG’s sales.
The company’s strategy of selling hotels in return for management contracts has resulted in strong free cash flow levels, allowing it to return over $7.5bn to shareholders since 2004.
The firm sold its London Park Lane hotel for £301.5m in March and is now in the process of selling its New York Barclay Hotel, which it began marketing in May.
As well as announcing the special dividend yesterday, IHG also raised its ordinary interim dividend by 10 per cent to 23 cents a share. Shares in London increased 6.4 per cent yesterday to close at 2,030p.
City A.M. Reporter