The group also said it would be returning £700m of capital to its shareholders, after a failure to find a big purchase to spend the money on.
In a trading statement for the year to September 2002 which accompanied the news of the split, SixC said that its retail division had seen "excellent" sales growth in food, wine, soft drinks, and, at its Express by Holiday Inns franchises, accommodation.
Overall sales were up in the year by more than 5%, with drink sales up by over 4% and food up nearly 10%. Sales per outlet rose to £14,200 a week and total invested like for like sales were up 2.0%.
However, the group said, it had "deliberately foregone" some volume in order to protect margins. As a result of this, and the effects of a poor summer compared to last year, core uninvested outlets like for like sales were down 1.5%.
It said another 148 ex-Allied sites had been converted to SixC brands in the year, with average sales rises of around 40% on the 401 ex-Allied sites converted so far. The development pipeline totalled some 500 sites.
The split, which still has to be approved by shareholders and the High Court, is not expected to take place before April next year. It will see Roger North, currently finance director of the whole group, become chief executive of the new Six Continents Hotels company, while Tim Clarke, currently chief executive of the whole group, will take up the chief exec's seat at the pubs and restaurants company.
On the retail side, Karim Naffah, currently group strategy director, will be finance director, while Mike Bramley and Tony Hughes will be board directors running the pubs/bars and restaurants sides respectively. The new company will be chaired by Roger Carr, a non-executive director of SixC since 1996 and also chairman of Chubb, the security company.
The current Six Continents Retail's two arms are the Restaurant Group, whose brands include Harvester, Vintage Inns, Toby, All Bar One and Browns, and the Pubs & Bars group, where the core brands are Goose, Scream and O'Neills in the High Street market and Ember Inns in the "suburban local" market. It totals more than 2,000 units, 1,100 being branded, with average sales per pub per week of more than £14,000.
Shareholders, who will have been given £3bn since 1997 in dividends and returned capital by the time the group is split, will receive shares in the two new companies in exchange for their existing SixC shares. However, they were warned that the aggregate dividends per share of the two new companies of were expected to be down 38% in the first year after separation compared to the expected 2002 total dividend per share.
SixC said the credit ratings agency Standard & Poor's had indicated the new Hotels company would be rated BBB/Baa2, while the new Retail company would be rated BBB-/Baa3.