IHG announces $900m share buyback after year of growth

(Sharecast News) - InterContinental Hotels Group (IHG) reported a full year of growth on Tuesday, alongside a fresh $900m share buyback programme and the acquisition of the Ruby lifestyle hotel brand. The FTSE 100 hotel giant, which operates a multitude of brands including Crowne Plaza and Holiday Inn, said revenue from reportable segments in 2024 rose 7% to $2.31bn, while operating profit increased 10% to $1.12bn.

Adjusted earnings per share climbed 15% to 432.4 cents.

The fee business revenue grew 6% to $1.77bn, and the company's fee margin improved by 1.9 percentage points to 61.2%.

However, IFRS operating profit declined 2% to $1.04bn due to a loss in the System Fund, and basic earnings per share fell 12% to 389.6 cents.

The total dividend per share for the year rose 10% to 167.7 cents.

IHG said it saw continued growth in its hotel network, adding 59,100 rooms across 371 hotels, a 23% year-over-year increase.

The company signed 106,200 rooms, a 34% rise from 2023, driven by an 88% increase in hotel conversions.

Its total global pipeline now stood at 325,000 rooms across 2,210 hotels, up 10% year-on-year.

IHG's revenue per available room (RevPAR) grew 3%, with strong performance in EMEAA of 6.6% growth, and the Americas, up 2.5%, offsetting a 4.8% decline in Greater China.

IHG chief executive officer Elie Maalouf said 2024 was an "excellent year" of financial performance, growth and progress.

"We continue to strengthen our enterprise to position IHG as the first choice for guests and owners, further improving and growing our brands, driving loyalty contribution, rolling out new hotel technology and increasing our ancillary fee streams," he said.

"Our cash generation and strong balance sheet supports further investment in growth, and we also continue to sustainably increase our ordinary dividend and the regular return of surplus capital through share buybacks.

"We enter 2025 with confidence in further capitalising on our scale, leading positions and the attractive longterm demand drivers for our markets, all of which supports the ongoing successful delivery of our growth algorithm."

In line with its commitment to returning capital to shareholders, IHG completed an $800m share buyback in 2024, and announced a new $900m repurchase programme for 2025.

The board said the new buyback, to be conducted through Merrill Lynch International, was designed to reduce the company's outstanding share count.

IHG also announced the expansion of its brand portfolio with the acquisition of Ruby, marking its 20th brand.

The initial purchase cost of $116m would provide IHG with a premium urban lifestyle brand known for its "lean luxury" concept, featuring space-efficient designs and high levels of automation.

Ruby currently operates 20 hotels across major European cities, with 10 more in development.

IHG said it planned to expand the brand globally, targeting over 120 properties within the next decade and more than 250 over 20 years.

The company said it was aiming to introduce Ruby in the US market by the end of the year.

"This acquisition demonstrates our focus on building our presence in large, attractive industry segments and using our experience of integrating and growing brands and hotel portfolios," IHG CEO Elie Maalouf added.

"The 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."

At 0825 GMT, shares in InterContinental Hotels Group were down 1.64% at 10,520p.

Reporting by Josh White for Sharecast.com.