Wednesday newspaper share tips: Spotlight on IHG after third quarter results
After strong third quarter results yesterday, the spotlight is on InterContinental Hotels Group in The Times’ Tempus column.
Babcock International Group
519.50p
15:20 25/04/24
FTSE 100
8,057.41
15:20 25/04/24
FTSE 350
4,423.54
15:20 25/04/24
FTSE All-Share
4,377.50
15:20 25/04/24
InterContinental Hotels Group
8,012.00p
15:20 25/04/24
Support Services
10,527.53
15:20 25/04/24
Travel & Leisure
7,566.72
15:20 25/04/24
The FTSE 100 company reported rising revenue per available room (revpar) and provided a confident outlook on Tuesday. Tempus noted that, unlike a number of key competitors, the company operates an asset-light model and has just finished disposing of a number of assets with the cash being handed back to investors.
However, Tempus said that the only thing that could change that is if it acquires something big, like Fairmont Raffles, which looks unlikely.
With the company due to announce in Feburary what it will do with the cash generated from the sale of a couple of Paris and Hong Kong assets, Tempus said it’s worth avoiding until the company makes that announcement, which has already been factored into the share price.
Over in The Telegraph’s Questor, it’s advising traders to sell shares in Babcock International. It flagged Liberum’s warning that the engineering and support services group is showing a few too many warning signs.
It’s mainly concerned with the management’s judgement on when returns from its long-term contracts are booked, as well as its poor provision for bad debts and depreciation charges.
With net debts of £1.33bn against net assets of £2.2bn after it bought Avincis, Questor thinks it’s a good time to take the profits and sell.