£10m windfall for InterContinental bosses angers union

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The Independent Online

Intercontinental Hotels has revealed a £10m management windfall and that the weak US dollar had hit third-quarter profits.

Intercontinental Hotels has revealed a £10m management windfall and that the weak US dollar had hit third-quarter profits.

The group, which was demerged from Six Continents last year, said yesterday the bonus payments reflected the strides it had made in recovering from the industry-wide downturn. The payout came as InterContinental remained locked in a dispute with hotel workers in San Francisco over its decision to stop paying healthcare benefits.

The £10m bonus will be split between about 2,000 staff, ranging from regional managers to hotel managers. The T&G union, which represents hotel workers, criticised the move, calling the decision to pay big bonuses at the top while company executives sought to cut benefits at the bottom "unfair".

A spokesman for T&G said: "Highly trained managers seem to have bypassed the lesson on how to take your staff with you. It's a familiar story of recognising the price of everything but the value of nothing. It is the cleaners, waiters, porters, maintenance staff and such like that keep businesses going. Their role should be properly recognised."

InterContinental, which runs more than 3,500 hotels worldwide, reported pre-tax profits of £97m for the three months to 30 September, up from £93m. Operating profits from its core hotels unit were flat at £76m, although excluding the hit from the soft dollar they rose 8 per cent. At its Britvic soft drinks arm, which is being readied for a stock market flotation, operating profits slipped to £26m from £27m.

Although its US, Asia Pacific and UK regions are trading well, the group said demand for hotel rooms remained subdued in western Europe.

The group is selling £2.2bn of assets and will return the proceeds to shareholders. It said plans to sell 20 hotels in the US, with a net book value of £505m, were "well advanced", describing its progress to sell a further 87 as "encouraging".

But shares in InterContinental, which have doubled since it gained a separate listing, slipped 15p to 664.5p on disappointment that the company had not made more headway. Analysts had also hoped that the group would firm up the timetable for its Britvic flotation. InterContinentalset a four-year window for the IPO, starting in January.

InterContinental appointed Citigroup and Deutsche Bank as advisers to the IPO, prompting speculation that it is gearing up to seek an early listing. Allied Domecq, which like Whitbread has a 23.75 per cent stake, is anxious to wait until a real IPO window opens up. A spokesman for the drinks group said: "The current market for IPOs is not particularly good. We're not convinced that we would get the best possible price for our stake if we sold early next year."

Richard Solomons, InterContinental's finance director, said: "All shareholders agreed we would IPO the company. What we haven't agreed is the timing. As with our other disposals we are looking to maximise value. We will let market conditions dictate when we float it."

Mr Solomons, who also chairs Britvic, said the search for a new chief executive to replace Richard North, who was ousted this year, was progressing well but declined to comment on the likely timing.

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