18th Feb 2025 08:54
(Alliance News) - InterContinental Hotels Group PLC on Tuesday expanded its hotel portfolio, as it launched a new share buyback after booking strong revenue growth in 2024.
The Berkshire, England-based hotel company said pretax profit in 2024 amounted to USD897 million, a decline of 11% from USD1.01 billion in 2023.
Total revenue was USD4.92 billion, up 6.5% from USD4.62 billion. Excluding System Fund and reimbursable revenue, revenue from reportable segments rose 6.8% in 2024 to USD2.31 billion, just shy of the company-compiled consensus of USD2.32 billion.
Operating profit from reportable segments increased 10% to USD1.12 billion, in line with consensus. However, pretax profit was hurt buy higher interest expenses and losses on currency movements. Net debt stood at USD2.78 billion on December 31, up 22% fro USD2.27 billion a year before.
Revenue per available room growth was 3.0% for the year, and 4.6% for the final-quarter alone.
By region in the fourth quarter, RevPAR grew by 4.6% in the Americas and by 6.9% in Europe, Middle East, Africa & Asia, but fell 2.8% in Greater China.
For 2024 as a whole, RevPar rose by 2.5% in the Americas and by 6.6% in EMEAA but fell by 4.8% in Greater China. In the US, RevPAR increased 1.7% across the year, accelerating from 0.6% in the first half to 2.6% in the second, and 4.1% in the fourth quarter.
Chief Executive Elie Maalouf said: "2024 was an excellent year of financial performance, strong growth and important progress against a clear strategy that is unlocking the full potential of our business for all stakeholders."
Shares in IHG fell were down 2.2% to 10,457.43 pence each in London on Tuesday morning. They are up 32% in the past 12 months.
In the fourth quarter, IHG opened 23,600 rooms in 147 hotels, up 23% year-on-year, the second-largest ever quarter of openings. For 2024, the company opened 59,100 rooms, up 23% on 2023.
IHG lifted its total dividend by 10% to 167.6 cents per share from 152.3 cents. It upped its final dividend by 10% to 114.4 cents. In addition, it announced that it will kick off a USD900 million share buyback on Tuesday. This will be run by Merrill Lynch and be completed by December 29.
Looking ahead, IHG is targeting compound growth in adjusted earnings of 12% to 15% annually on average over the medium to long term. In 2024, adjusted EPS rose 15% to 432.4 US cents from 375.7 cents.
CEO Maalouf said: "We enter 2025 with confidence in further capitalising on our scale, leading positions and the attractive long- term demand drivers for our markets, all of which supports the ongoing successful delivery of our growth algorithm."
IHG also on Tuesday announced a deal to acquire the Ruby brand from Ruby Sarl and related intellectual property for an initial EUR110.5 million.
Additional payments of up to EUR181 million may become due in 2030 and 2035. Future payments are contingent on the number of Ruby-branded rooms operated by the seller at the end of the preceding year.
"Ruby is a premium urban lifestyle brand for modern travellers in must-visit city destinations and provides hotel owners with space-efficient designs and an attractive, flexible concept that IHG expects to rapidly expand globally," IHG said.
The Ruby brand currently operates 20 hotels with 3,483 rooms in major cities across Europe and has another 10 pipeline hotels with 2,235 rooms. IHG is targeting the Ruby brand to grow to more than 120 hotels over the next 10 years and accelerate to more than 250 over 20 years across owners globally.
CEO Maalouf said: "The urban micro space is a franchise-friendly model with attractive owner economics, and we see excellent opportunities to not only expand Ruby's strong European base but also rapidly take this exciting brand to the Americas and across Asia, as we have successfully done with previous brand acquisitions."
The Ruby brand has achieved a net system size compound annual growth rate of 26% over the last five years, IHG said.
By Jeremy Cutler, Alliance News reporter
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