Intercontinental continues hotels sale

Hotels group InterContinental is to sell a further 76 properties worth around £1.3bn (€1.9bn) as it continues its strategy of moving away from owning hotels, it said today.

The sale of sites – mainly UK-based Holiday Inns – will help fund the return of £750m (€1.1bn) to investors, £500m (€731.5m) of which will be paid as a special dividend in December.

It came as the group revealed profits had soared by 55.4% in the first half after its recovery continued in the UK, the US and Asia Pacific.

Chief executive Richard North said: “This is a strong set of results reflecting improvements in operating performance coupled with recovery in key markets such as the US, UK and Hong Kong.”

However, he added that Western Europe, particularly Paris, remained a challenge.

InterContinental owns, manages, leases or franchises more than 3,500 hotels under the InterContinental, Holiday Inn and Crowne Plaza brands in almost 100 countries.

Since a demerger separated it from leisure conglomerate SixContinents last year, the London-based group has been selling off properties in a bid to concentrate on management and franchises.

Hotels put on the market today are all based in the UK, apart from the InterContinental Paris, and also include Holiday Inn sites in London’s Mayfair and Kensington.

It brings the total value of hotels sold or being marketed by the company to more than £2.2bn (€3.2bn).

InterContinental may continue to manage or franchise the hotels put up for sale today, as it has done with the majority of other sales.

The rise in profits to £143m (€209.2m) in the six months to June 30 included a 50.7% hike in operating profits at the hotels division.

InterContinental has been recovering from the impact of the Iraq war, which led to some of the worst conditions ever seen in the industry.

Today it said current trading remained strong in the UK, where it is gaining significant market share, as well as the US and Hong Kong. Growth across all brands is being led by the return of business travellers and helping to offset the weak European market.

The group also owns the Britvic drinks business, whose operating profits fell to £30m (€43.9m) from £31m (€45.4m) in the second quarter due to reinvestment in the Pepsi franchise.

Britvic is due to float on the London stock market between January 2005 and December 2008, but the group said today that no firm date had been set.

Shares rose by 15.5p to 594.5p, an increase of nearly 3%.