Holiday Inn owner InterContinental Hotels (IHG) is in the ascendancy after surpassing market expectations with its latest set of numbers. Underlying earnings per share jump by 23% to approximately 203 cents (£1.63) in the year to 31 December.
Management says strong room expansion and revenue per available room (RevPAR), a performance metric that assesses how effective a hotel operator is at filling its beds, is behind the growth.
Sales are up 4.6% from $1,1513m to $1,582m.
SHAREHOLDERS REWARDED
Shareholders are rewarded with an 11% rise in its dividend from 85c (0.68p) to 94c (0.75p).
The good news keeps on coming as the cash-generative company also announces a $400m special dividend.
InterContinental has a good track record of returning cash to investors as it has returned a whopping $12.8bn since becoming a standalone company in 2003.
Investment management firm Patronus Partners believes InterContinental Hotels is in a prime position to benefit from long-term growth in global travel and tourism.
Numis analyst Tim Barrett is more cautious with a ‘hold’ recommendation as the group’s performance in the US is lagging in comparison to the wider market.
