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InterContinental Hotels profit up; lifts dividend

InterContinental Hotels Group PLC IHG said Tuesday that 2017 pretax profit rose above market expectations, and raised its total dividend for the year.

The Crowne Plaza and Holiday Inn hotel owner said pretax profit was $678 million, compared with $591 million a year earlier.

The consensus forecast for 2017 pretax profit was $671.5 million, according to FactSet.

Net profit for the year was $592 million compared with $414 million in 2016, the company said, beating the consensus forecast of $463.1 million.

Group revenue for the year rose 4% to $1.78 billion, the company said. This compares with a market consensus, according to FactSet, of $1.79 billion.

Comparable revenue per available room, a key industry metric, increased 2.7% on organic net room growth of 4%, the company said.

The board proposed a total dividend for the year of 104 cents a share, up from 94 cents a year earlier.

The company will undertake an efficiency program targeting $125 million in savings annually and use the savings for reinvestment, it said.

InterContinental Hotels has a positive outlook for the remainder of 2018 said Keith Barr, who took over as group chief executive in July.

The company said it expects the recent U.S. tax reform to have a mid-to-high single-digit percentage point benefit on its effective tax rate from 2018 onwards, taking it to the mid- to low- 20% range.

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