Yahoo Finance FTSE 100: Holiday Inn owner IHG announces share buyback as profits more than double
Holiday Inn and Crowne Plaza-owner InterContinental Hotels Group (IHG.L) announced a $500m (£414m/ €490m) share buy back programme after it saw half-year profits more than double.
IHG benefited from higher room prices, strong demand for leisure travel and a recovery in business stays.
The group announced it was resuming its interim dividend payout following the bumper set of results, at a level that is 10% higher than the last time it was paid out in 2019, while it also unveiled further shareholder returns through a $500m share buyback.
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IHG reported pre-tax profits jumping to $299m in the six months to June 30, up from $67m a year earlier. Group earnings more than doubled to $361m from $138m.
"Whilst the economic outlook faces uncertainties as central banks and governments take action to manage inflation, we remain confident in our business model," IHG chief executive officer, Keith Barr, said.
The UK market saw revenue per available room (RevPAR) – a key measure of performance for hotel chains – edge closer to levels seen before the pandemic struck, down 2% in the second quarter versus 2019, against a fall of 8% for the first half as a whole.
IHG pinned the positive performance on a rebound in tourism in London, although revenue per room was still down 10pc.
The hotel chain said its sites were grappling with surging costs and difficulties hiring staff, but insisted it could use its scale to offset this.
RevPAR for the Americas, its largest market, was 3.5% above pre-pandemic levels.
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It comes as the travel industry experiences steady demand after the lifting of COVID-19-related travel restrictions.
Barr said that even China had seen a "strong recovery" after a period of strict pandemic lockdowns. But he noted that the "risk of further volatility in the region still remains".
Watch: UK economy returns to growth aided by travel rebound and haulage
