InterContinental Hotels Group PLC (LON:IHG), the global hospitality company, has been actively purchasing its own shares, a process known as a share buyback, as detailed in a recent 6-K filing with the Securities and Exchange Commission. The company, which is incorporated in England and Wales, has been executing these buybacks in accordance with the authority granted by its shareholders during the Annual General Meeting held on May 3, 2024.
The buyback transactions occurred between September 20, 2024, and October 3, 2024, with the company acquiring shares on the London Stock Exchange through Goldman Sachs International. The shares were purchased at varying prices, with the company intending to cancel all the acquired shares, thereby reducing the number of shares in issue and potentially increasing the value of remaining shares.
For instance, on Monday, the company bought back 10,000 shares at prices ranging from £79.82 to £80.90, with an average cost of £80.5068 per share. Following this transaction, the company reported having 159,316,100 ordinary shares in issue, excluding 6,956,782 held in treasury.
The series of transactions concluded on Thursday, with the purchase of 9,918 shares at prices between £81.28 and £82.42 each, averaging £81.8675 per share. Post this activity, InterContinental Hotels Group PLC has 159,306,182 ordinary shares in issue, with the treasury shares excluded.
The company's share buyback program is a common strategy used by publicly-traded companies to return value to shareholders. By reducing the number of shares available on the market, the earnings per share (EPS) may increase, provided the net income remains constant. This can lead to a higher stock price, benefiting the shareholders.
Investors and analysts can access a full breakdown of each day's individual share purchases through the links provided in the SEC filing. The company has provided contact information for investor relations and media relations for further enquiries. The information presented in this article is based on a press release statement from the SEC filing by InterContinental Hotels Group PLC.
In other recent news, InterContinental Hotels Group announced the approval of a £4 billion Euro Medium Term Note Programme as part of its financial strategy. The company also declared an interim dividend for 2024 at a rate of 40.8 pence per ordinary share, reflecting its financial performance and commitment to shareholder value.
Goldman Sachs upgraded InterContinental's shares from 'Neutral' to 'Buy', citing potential for enhanced long-term earnings per share growth and additional revenue opportunities. The firm also projected a 15.1% compound annual growth rate in earnings for InterContinental from 2023 to 2028.
In a recent earnings call, InterContinental expressed confidence in its growth trajectory, reporting positive revenue per available room growth and plans to open over 7,000 rooms this year as part of its net unit growth of 4.2%. The company also revealed progress with its credit card and its ongoing commitment to return surplus capital to shareholders. These recent developments highlight InterContinental's strategic financial moves and positive outlook in the hospitality industry.
InvestingPro Insights
InterContinental Hotels Group's recent share buyback program aligns with its financial position and market performance. According to InvestingPro data, IHG boasts a substantial market capitalization of $17.16 billion, reflecting its significant presence in the global hospitality industry. The company's stock has shown strong performance, with a impressive 49.17% total return over the past year.
InvestingPro Tips highlight that IHG has raised its dividend for 3 consecutive years, demonstrating a commitment to returning value to shareholders through multiple channels. This, combined with the ongoing share buyback program, suggests a robust capital allocation strategy.
However, investors should note that IHG is trading at a high P/E ratio of 27.77 relative to its near-term earnings growth, which may indicate the stock is currently priced at a premium. Analysts anticipate a sales decline in the current year, which could impact future financial performance.
For a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide valuable insights into IHG's financial health and market position.
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