InterContinental Hotels Group PLC (LON:IHG) saw its shares drop in morning trading after the firm reported slower growth in global rooms revenue for the second quarter, hurt by a decline in the US due to a later Easter this year.
Posting results for the half year to June 30, the FTSE 100-listed group said its global comparable revenue per available room (RevPAR) was up 1.5% in the three months to June 30, down from 2.7% growth in the first quarter and 2.5% growth a year earlier.
READ: Credit Suisse is checking out of InterContinental Hotels after a long stay
The Holiday Inn chain operator said the second quarter RevPAR slowdown included a decline of 0.4% in the US, adversely impacted by the timing of Easter which was in the first quarter a year earlier.
For the first half overall RevPAR growth was 2.1% helping the group’s reported revenue to increase by 2% to US$857mln, while operating profit rose by 8% to US$370mln.
IHG’s chief executive Keith Barr said in a statement: "While we will always face macro-economic and geopolitical uncertainties, we remain confident in the outlook for 2017."
Shares see some profit-taking
IHG shares topped the FTSE 100 fallers in early morning trading, shedding nearly 5% at 4,201p.
In an initial note to clients, analysts at Liberum Capital reiterated a ‘hold’ rating on the stock with a 4,600p target price, noting that the valuation remains full, with IHG shares up 26% in the year-to-date.
They said the “investor focus is likely to be on strategy and his plans to extend brand range to drive up the rate of new openings. To this end, a new US Midscale brand has been launched with strong initial interest from existing franchisees.”
The analysts added: “While this is not new, further evidence of an accelerating pipeline is encouraging, offsetting some of our concerns about RevPAR slowdown, although not all.”
IHG hiked its interim dividend by 10% to 33 US cents, up from 30 US cents a year earlier.
-- Adds share price, analyst comment --