Yahoo Finance InterContinental Hotels shares slide despite $500m dividend
A $500m (£384m) special dividend announced by InterContinental Hotels failed to impress investors, with shares in the company falling more than 5pc to £39.46 after a disappointing third-quarter trading update.
Stocks dropped to their lowest level since October 2017 in early trade.
The FTSE 100 company, whose brands include Crowne Plaza and Holiday Inn, left investors underwhelmed as it reported global revenue per room rose 1pc compared to the same period last year.
The group benefited from strong growth in Russia during the World Cup and a boost in corporate demand in China, which saw revenue rise 4.8pc.
But it was not enough to offset the weak occupancy numbers in the US, which reported a 0.5pc drop in revenue per room, partly due to hurricane related factors upping demand the previous year.
The size of the company grew 5.1pc year-on-year and the dividend is expected to be paid in the first quarter of next year.
“The fundamentals for our industry remain strong,” said Keith Barr, chief executive. “We are confident in the outlook for the remainder of the year and in our ability to deliver industry-leading net rooms growth over the medium term.”
Nicholas Hyett of Hargreaves Lansdown said: “With IHG rapidly expanding its rate of room growth, including some sizeable acquisitions and new brand launches, lower revenues are far from welcome. Having been behind the wider sector in terms of new openings earlier in the cycle, the worry is that IHG is playing catch up just as the market starts to cool.”
