InterContinental Hotels Group PLC reported higher annual profits, partly reflecting gains from ongoing business restructuring, and revealed plans to pay 500 mln stg in special dividends this year.

The group's pretax profit rose to 284 mln stg in the year to December 2005 from 264 mln last time, helped by cost cuts and asset disposals, which mitigated the fall in turnover to 1.9 bln stg from 2.2 bln. Operating profit grew to 317 mln stg from 297 mln.

The group is continuing with its cash distribution programme, funded by proceeds from asset sale. It promised to return a further 500 mln stg to shareholders, payable in the second quarter of 2006, following the sale of its shares in drinks group Britvic PLC and Felcor Lodging Trust Inc.

It also raised final dividends by 7 pct to 10.7 pence per share, lifting the full-year payout by 7 pct to 15.3 pence.

The company said its 'transformation to a managed and franchised business' is nearing completion, aiding the 57 pct rise in the number of rooms it signed up in 2005 to 70,000.

'Pipeline is the industry's largest at 108,500 rooms, 20 pct of existing room count. Room count up 3,300 to 537,500 rooms; 11,800 net rooms added, before South African franchise exits and closure of hurricane damaged properties,' it said, adding that it has 11,100 rooms signed so far in the year, including 6,000 rooms in China with two new partners.

Revenue per available room across its 3,600 hotels grew 9 pct in 2005, and is continuing to grow currently.

Looking ahead, chief executive Andrew Cosslett said: 'The record number of hotels we currently have under development gives us confidence we can grow this business and achieve our rooms target as we look to the years ahead.'

Intercontinental said its disposal programme is proceeding and it is planning to sell a further 13 hotels to raise proceeds of around 159 mln stg.

Around seven InterContinental hotels in Europe were placed on the market in January this year, and the company said 'early interest (from potential buyers) has been good'.

It has now sold 126 owned and leased hotels, while retaining management and franchise contracts.

That partly funded the group's cash distribution programme which has so far reached 2.75 bln stg, including the 500 mln stg in special dividends it announced today.

http://www.forbes.com/business/feeds/afx/2006/ ...