Intercontinental Hotels Group PLC shares rose strongly in early trading on Tuesday after the hotelier hiked its dividend 10% and unveiled a $950 million share buyback.
The owner of the Holiday Inn and Crowne Plaza hotel brands reported a 13% increase in operating profit to $1.27 billion in the calendar year, as total revenue climbed 5% to $5.2 billion and revenue per available room (revPAR) increased 1.5%.
Growth was strongest in Europe, the Middle East, Asia and Africa, where revPAR was up 4.6%, while the Americas edged up 0.3% and Greater China fell 1.6%.
Some 443 hotels were opened, adding 65,100 rooms, as the FTSE 100-listed group signed a further 694 hotels to increase its estate to 6,963 hotels worldwide, with a pipeline of 2,292 more.
Net debt rose to $3.33 billion, largely reflecting more than $1.1 billion returned to shareholders through dividends and buybacks.
The board announced a final dividend of 125.9 cents, taking the full-year payout to 184.5 cents and a fourth consecutive year of increasing the dividend by at least 10%.
Chief executive Elie Maalouf said the opening of a record number of hotels and the strong financial performance was delivered "in the face of some turbulent trading conditions".
Over five years, he noted, IHG will have returned more than $5 billion to shareholders.
"Supported by attractive long-term industry demand drivers and our proven ability to capitalise on our scale and diverse fee streams across segments and geographies, we enter 2026 with confidence."
He said long-term industry demand remains supportive, with global room nights expected to grow at a 3.6% compound annual rate to 2035.
The group is targeting compound annual growth in adjusted earnings per share of 12-15% over the medium to long term, underpinned by further revPAR growth, new hotel openings and expansion of higher-margin fee income streams.
Analysts at Jefferies said they thought IHG "delivered a solid print across the board", in particular noting strong fee margin expansion from operating leverage and a step-up in ancillary fees.
With fourth-quarter revPAR momentum also improved, the analysts said they "remain confident" on accelerating revPAR growth in 2026, "which compounded with net system size growth, fee margin expansion and buyback should drive another year of low-to mid-teens EPS growth, in line with US peers".
The shares jumped to 150p in early trade, before easing back to $144.9, almost flat on the day so far.
** Update: Adds share details and broker comment **