InterContinental Hotels Group has announced the flotation of Britannia Soft Drinks and the sale of £1 billion of properties as it continues to wrestle with its birth as an independent company.
InterContinental Hotels Group (IHG) said that Britannia, which owns Tango and Robinsons brands and the UK rights to Pepsi and 7UP, would be floated between 2005 and 2008. The decision followed a bottling rights and restructuring deal which has given PepsiCo, the US drinks giant, a 5 per cent stake, leaving IHG with 47.5 per cent and Allied Domecq and Whitbread with 23.75 per cent holdings.
Britannia achieved a 22 per cent rise to £83 million in operating profits last year as the hot summer boosted demand for drinks and helped the volume of Tango sold surge by 14 per cent.
The flotation announcement came as IHG, spun off from Six Continents last year in the demerger process which also created Mitchells & Butlers, revealed that it would sell between £800 million and £1 billion in hotels. Last year IHG, the world's leading hotelier, raised £250 million from the disposal of 20 properties including the InterContinental Mayfair.
IHG also announced plans to reduce its annual outgoings by $120 million this year. Cost savings of $110 million last year helped the company limit to 5.4 per cent, to £244 million, a decline in profits despite what Richard North, the IHG chief executive, said was "probably the most difficult period in the industry in living memory".
Mr North added: "Sluggish economies around the world, the threat of war in Iraq followed by war, the advent of Sars and the reluctance of Americans to travel, particularly to France, made it so."
The company noted, however, a revival in markets outside continental Europe.
"Trading over the last six months now gives us some confidence to say that we believe conditions are improving steadily in both the Americas and the UK," Mr North said.
"Furthermore, trading in Asia Pacific has recovered substantially since the Sars scare."
The statement was generally well received in the City, with Merrill Lynch retaining its "buy" advice on IHG stock and saying the results contained “a number of very positive points".
IHG shares stood 6.5p lower at 516.5p in morning trade.
