InterContinental Hotels Group Plc (IHG), the world’s largest provider of hotel rooms, reported a 6 percent gain in first-half profit and said it will return $1 billion to shareholders through a special dividend and share buyback.
Operating profit excluding exceptional items for the six months ended June 30 climbed to $286 million from $269 million a year earlier, the Denham, England-based company said in a statement today. InterContinental, owner of the Holiday Inn chain, said revenue climbed to $878 million from $850 million.
InterContinental is benefiting from rising demand in emerging markets such as the greater China region, which accounts for about 10 percent of revenue. About 30 percent of its global expansion over the next three to five years will be in the region. The company generates about half of its revenue in the Americas.
InterContinental has gained about 58 percent in the past 12 months in London trading, the second-best performance in the FTSE 350 Travel and Leisure Index after EasyJet Plc, which has risen 70 percent.
Nelson Peltz’s funds bought 4.27 percent of InterContinental in May. Peltz’s Trian Fund Management LP may put pressure on the company to accelerate plans to create value for shareholders, Jeffrey Harwood, an analyst at Oriel Securities, said in a July 20 note to investors. Harwood has a buy rating on the stock.
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