Intercontinental Hotels Group PLC (LSE:IHG) checked in with extra bags alongside its final results on Tuesday, with a $900 million share buyback and the acquisition of the 'urban micro' hotel brand, Ruby.
In its results for the past calendar year, the FTSE 100-listed hotels group reported a 15% increase in earnings per share to just above market expectations, helped by an acceleration in revenue per available room (revpar) in the final quarter.
Annual revenues increased 7% to $2.3 billion, with global increasing 3.0% thanks to a 4.6% jump in the fourth quarter. Analysts had expected a 2.6% rise for the year.
Operating profit swelled 10% to $1.12 billion and, thanks to previous $800 million of share buybacks, adjusted earnings per share by 15% to 432.4¢.
On a statutory basis, operating profit fell 2% to $1.04 billion and EPS shrank 12% to 389.6¢.
A final dividend of 114.4¢ was proposed, up 10% compared to a year ago, resulting in a total dividend for the year of 167.6¢, also up 10%.
The buyback launched today, along with dividends, is expected to return over $1.1 billion to shareholders in 2025.
IHG said it also has acquired the “premium urban lifestyle” Ruby hotel brand for an initial €110.5 million.
With 20 hotels currently in operation in various major European locations, the company said Ruby is “a 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”, including a pipeline of 10 more hotels.
It will be IHG’s 20th hotel brand, and group chief executive Elie Maalouf said Ruby's “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".
He said IHG enters 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.”