InterContinental hands back £500m

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The Independent Online

InterContinental Hotels announced a special dividend payout of £500m to shareholders yesterday, and hinted there might be more to come from hotel sales.

Shareholders are reaping the benefits of the group's flotation of Britvic, the soft drinks business, in early December, which yielded £371m, and the sale of its shareholding in the US hotel investment trust FelCor.

The chief executive Andrew Cosslett said he would push the InterContinental brand harder in the US and reiterated the group's target of adding a net 60,000 rooms globally to the current 538,000 by the end of 2008. "It's a stretching target but we're certainly confident of hitting it," he said. China is the group's main focus where it hopes to have 125 hotels open by 2008.

The world's largest hotel operator, which runs about 3,600 hotels including the Holiday Inn and Crowne Plaza chains, unveiled a 48 per cent jump in pre-tax profits on continuing businesses to £166m last year on turnover of £852m.

Under Mr Cosslett, the group has sold most of its properties but retained the management and franchise contracts to become a "pure play" hotel company. Last year, InterContinental signed up 70,000 rooms, and in the first two months of this year it took on more than 11,000 new-room projects, including almost 6,000 in China.

The hotelier is negotiating the £600m sale of 31 European hotels in the final round of its sell-off, which could mean a further payout to shareholders. This will leave the company owning just 20 hotels in cities such as Hong Kong, Paris, New York and London. Since demerging from Six Continents in 2003, the group has sold £2.3bn of assets and returned nearly £2bn to shareholders.

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