(DUBLIN) InterContinental Hotels Group plc, the owner of the Holiday Inn chain, said first-quarter profit fell 34 per cent following the sale of hotels to focus on managing and franchising sites.
Net income declined to £31 million (S$82.8 million), or 10.5 pence a share, from £47 million, or 12.9 pence, a year earlier, InterContinental said yesterday in a statement. That beat the £25 million average estimate of three analysts surveyed by Bloomberg.
InterContinental, whose chains include Crowne Plaza and Indigo, increased the number of rooms in its network by 5,267 in the first quarter.
The Windsor, south England-based company added management and franchise contracts after selling property worth £3 billion in 2003 to 2006.
'Our broad market coverage, record pipeline, strong brands and resilient fee-based business model position us well for continued growth,' chief executive Andrew Cosslett said in the statement.
InterContinental's stock has declined 6.7 per cent this year.
Revenue from continuing operations increased 15 per cent to £226 million during the first quarter.
Mr Cosslett said in February that the company had added more than 47,000 net hotel rooms since 2005, and was on course to beat its goal of raising that number to between 50,000 and 60,000 by the end of 2008.
The hotelier is also spending US$1 billion to renovate the Holiday Inn chain.
InterContinental, founded as a unit of Pan American World Airways to accommodate aircrew, said yesterday that it added more than twice the number of rooms in the first quarter compared with the same period a year earlier.
Revenue per available room, an industry gauge of profitability, gained 3.5 per cent at constant exchange rates in the first quarter, held back by the earlier timing of Easter this year, InterContinental said.
Pretax profit declined 25 per cent to £42 million, beating the £34.5 million average estimate.
Mr Cosslett, a former Cadbury Schweppes plc executive, said in February that London and southern England were experiencing 'a bit of downward pressure' on visits from the United States as the US dollar's drop made trips more expensive.
He added, however, that that was offset by growth in the number of visitors from the Middle East and China.
The company owns, manages or franchises almost 4,000 hotels in about 100 countries.
InterContinental still owns 18 properties and said last year that it would sell the rest in 'years' rather than months. -- Bloomberg
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