- Revenue and RevPAR ahead
- Profit in line but dividend light
- Lack of upgrades weighs
Lodging group Intercontinental Hotels (IHG) posted a mixed score-card in terms of full-year results, with revenue beating estimates but operating profit and EPS (earnings per share) just about meeting expectations and no suggestion of an upgrade to guidance.
The shares, which have gained more than 35% over the past year against a 13% rise in the FTSE 100, eased back 240p or 2.2% to £104.55.
NEW OPENINGS LIFT GROWTH
The group, which owns 20 separate hotel brands including Intercontinental, Crowne Plaza and Holiday Inn, reported a 6% increase in total gross revenue to $33.4 billion.
Global RevPAR (revenue per available room), a measure closely watched by analysts, increased by 3.5% over the year and 4.6% in the final quarter, topping the 2.6% company-compiled consensus.
US RevPAR accelerated from 0.6% growth in the first half to 2.6% in the second half and 4.1% in the final quarter, although RevPAR in Greater China was down 4.8% for the year.
To give some idea of the scale of the business, 371 hotels and 59,000 new rooms were added to the system during the year taking the total estate to 987,000 rooms across 6,629 hotels.
In the fourth quarter alone, 23,600 new rooms were added across 147 hotels making it the second-busiest quarter ever in terms of openings.
Moreover, the firm has a pipeline of another 325,000 rooms across 2,210 hotels including new build signings and conversions.
NO EARNINGS UPGRADE
Operating profit of $1.124 billion was fractionally ahead of the consensus but towards the low end of the range of estimates, while the EPS figure of $4.32 was just a penny better than the consensus.
However, the total dividend of $1.68 was short of the $1.72 forecast by analysts and a long way below the top estimate of $1.88 per share.
Having handed back more than $1 billion to shareholders last year, in the form of $259 million of dividends and an $800 million share buyback, the firm announced it would repurchase a further $900 million worth of stock this year.
Reducing the number of shares in issue will help towards the company’s target of generating 12% to 15% compound annual EPS growth, but there was no suggestion of an upgrade to the earnings outlook in the statement.
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