LONDON Feb 18 Shares in InterContinental Hotels
Group fell on Tuesday as a failure to announce a return
of cash to shareholders and higher-than-expected costs for 2014
eclipsed a 10 percent rise in 2013 profit.
The firm, which declined to comment on future plans for cash
returns, said refurbishments to hotels in Asia and the Middle
East, Paris and New York would put capital expenditure at around
$385 million in 2014, ahead of analyst forecasts, with the
impact from hotel and room closures reducing operating profit by
IHG's strategy of managing hotels they have sold to
developers has enabled it to return around $9.6 billion to
shareholders in 10 years, and some analysts had expected more to
come following the $240 million sale of IHG's stake in its New
York Barclay hotel.
Shares in IHG, home to brands such as Crowne Plaza, Holiday
Inn, and InterContinental, slipped 4.3 percent to 1958 pence on
Tuesday, as analyst expectations for further cash returns failed
to materialise, taking the shine off a rise in pretax profit to
"Fourth quarter trading and full year results were positive,
although 2014 is shaping up as a high capex year," Investec
analyst James Hollins said in a note, adding the higher
investment could be a potential delay to further cash returns.
Alongside its results IHG, which competes with the likes of
Accor, Marriott and Starwood, said it had sold
its Mark Hopkins hotel in San Francisco for $120 million, taking
total gross disposal proceeds for 2013 to $830 million.
The group posted 2013 revenue up 3.7 percent to $1.9
billion, and said global revenue per available room (RevPAR), a
key industry measure, rose 3.8 percent for the year, helped by
solid trading in the United States, where hoteliers are
benefiting from improving demand and lower than average growth
in new rooms.
Trading strengthened across the group in its fourth quarter,
remaining solid in Asia and the Middle East, and in the United
States, which accounts for roughly two-thirds of IHG's operating
profit. Europe posted a sharp increase in RevPAR from 0.7
percent in the first nine months to 4.9 percent in the last
There was also an improvement in Greater China, where almost
a third of IHG's expansion pipeline is located, with the firm
shrugging off slower macroeconomic conditions.
"Looking into 2014, although economic conditions in some
markets remain uncertain, forward bookings data is encouraging
and we are confident that we will deliver another year of
growth," Chief Executive Richard Solomons said in a statement.
IHG raised its total dividend per share by 9 percent to 70