Holiday Inn 2005 Annual Report Download - page 6

Return of Funds
IHG’s second £250m on-market share repurchase programme was
announced in September 2004 and commenced in December 2004.
In 2005, 30.6 million shares were repurchased at an average price
of 672p making the total purchased under the second programme
£211m. On 8 September 2005, IHG announced a further £250m
share repurchase programme to commence on completion of the
second programme. The precise timing of share purchases will be
dependent on, amongst other things, market conditions. Purchases
are under the existing authority from shareholders which will be
renewed at the Annual General Meeting. Any shares repurchased
under this programme will be cancelled.
On 8 July 2005, IHG returned a further £996m capital to
shareholders following the capital reorganisation of the Group
completed in June 2005. Under the reorganisation, shareholders
received 11 new ordinary shares and £24.75 cash in exchange
for every 15 existing ordinary shares held on 24 June 2005.
A more detailed explanation of the capital reorganisation is
contained in the Directors’ Report on page 18.
In March 2006, IHG announced that a £500m special dividend
will be paid to shareholders in the second quarter of 2006.
Since April 2003, IHG has announced the return of £2.75bn
of funds to shareholders by way of special dividends, share
repurchase programmes and capital returned (see figure 4).
Management and Organisation
During 2005, a number of key organisational changes were made
to support the achievement of IHG’s strategic priorities, including:
• the appointment of Stevan Porter as Global Leader, Franchise
Strategy with responsibility for the development and deployment
of best practice in franchising globally in addition to his role as
President, The Americas;
• the appointment of Peter Gowers as Chief Marketing Officer,
with responsibility for the development of IHG’s worldwide brand
priorities and brand management;
• expanding the role of Richard Solomons, Finance Director to
include the development of relationships with major investors
operating in multiple countries;
• the realignment of certain functions (Finance, Human Resources
and Information Technology) under global functional heads to
gain synergies and increase the focus of the organisation on
achieving the strategic priorities; and
• the appointment of Tracy Robbins as Executive Vice President,
Human Resources.
On 31 January 2006, the Group announced the appointment of Tom
Conophy as Chief Information Officer.
operating and financial review
4InterContinental Hotels Group 2005
FIGURE 3
Asset disposal programme detail Number of hotels Proceeds Net book value
Disposed to date 144 £2.3bn £2.2bn
On the market 31 – £0.6bn
Remaining hotels 22 – £0.9bn
FIGURE 4
Return of funds programme Timing Total return Returned to date Still to be returned
£501m special dividend Paid December 2004 £501m £501m Nil
First £250m share buyback Completed in 2004 £250m £250m Nil
Second £250m share buyback Ongoing £250m £211m £39m
£996m capital return Paid 8 July 2005 £996m £996m Nil
Third £250m share buyback Yet to commence £250m – £250m
£500m special dividend Second quarter 2006 £500m – £500m
Total £2,747m £1,958m £789m