IHG to give shareholders $1.5B special dividend

IHG Hong Kong

After posting solid results for 2015, InterContinental Hotels Group is planning to give shareholders a $1.5 billion special dividend.

IHG also plans to raise its total dividend for 2015 by 10 percent to $0.85, despite currency movements affecting revenues in Europe and Asia, according to the Financial Times. CEO Richard Solomons, said that the company was seeing “record demand” in the U.S.

Reported profit (before tax) of $1.4 billion was helped by the sale of hotels in Paris and Hong Kong and the transition to an "asset-light" model. IHG’s reported revenue fell 3 percent from 2014's numbers to $1.8 billion, while operating profits rose 4 percent to $680 million—slightly above analysts’ expectations. The company said the strong dollar reduced profits by $25 million and predicted volatile currency markets would also have an impact on profits in 2016.

Global RevPAR rose 4.4 percent, helped by the Americas and Europe, but growth in the “greater China” region was weaker, with an increase of only 0.3 percent for the year and a decline in the fourth quarter. Hong Kong and Macau saw “significant declines,” the report indicated. While Solomons expressed some concern about the Chinese downturn, he remained “very optimistic” about the region, which has become the company’s second-most important market.

“There’s been a lot of negativity, but most countries would still do anything for 6.7 percent growth,” he said.