InterContinental Hotels Q1 RevPAR Up, To Pay $750 Mln Spl. Dividend; Shares Rise

(RTTNews) - InterContinental Hotels Group Plc (IHG, IHG.L) Friday reported 6 percent growth in global revenue per available room, driven by increase in occupancy and average daily rate. The company announced a special dividend totaling $750 million, and said it is reviewing opportunities for further asset disposals.

Looking ahead, the firm noted that current trading trends gives it confidence for the rest of the year. The shares were up more than 9 percent in the morning trade on the London Stock Exchange.

Richard Solomons, chief executive of the company said, "We have made an excellent start to the year with our strongest RevPAR performance in seven quarters and our best first quarter for pipeline signings in six years. This reflects the continued growth momentum in the business and the strong preference for our portfolio of brands from both owners and guests."

In an interim management statement, the company said global revenue per available room or RevPAR, grew 6 percent, driven by 2.4 percentage points rise in occupancy and 1.9 percent improvement in average daily rate.

In the Americas, RevPAR increased 6.6 percent. According to the company, the 6.4 percent RevPAR growth in the U.S., was driven by mid to high single digit performance across all of its brands, led by its Crowne Plaza and extended stay brands.

In Europe RevPAR was up 6.1 percent compared to last year. Double digit growth in the UK reflected better macro-economic conditions and relatively soft comparatives in the same period a year ago, the firm said. In Germany RevPAR growth was 5.1 percent.

Asia, Middle East & Africa showed a RevPAR increase of 3.8 percent, but was up 7.1 percent excluding Thailand, Egypt and Lebanon where there has been ongoing political unrest during the period.

RevPAR in Greater China was up 3.9 percent, led by strong growth in tier one cities and resorts.

Net rooms increased 2.2 percent year-on-year to 689 thousand rooms.

The company said it completed two major asset sales in March, and said it is now reviewing opportunities for further asset disposals, which is in line with its strategy to continue to reduce capital intensity of the business.

The firm noted that a $750 million special dividend with share consolidation will be paid in July 2014, subject to shareholder approval. "This reflects our clear capital allocation strategy whereby we are committed to returning surplus funds to shareholders, whilst maintaining an efficient balance sheet and continuing to invest behind growth," Solomons said.

IHG.L is currently trading at 2,209 pence, up 185 pence or 9.14 percent, on a volume of 1.04 million shares.