Product testing group Intertek (ITRK) began to feel the benefits of its restructuring programme - initiated in response to a weak oil and gas market - during the first half of this year. Cost-cutting measures implemented in prior years helped boost operating margins within the chemicals/pharma and commodities divisions. The fact that the group was without the £9.7m costs incurred last year to carry out these efficiency measures also helped. Add to this good growth in its higher-margin consumer goods division and operating profit grew 17 per cent to £154m.
In commodities, revenue for the group's cargo and analytical division benefited from an increase in outsourcing contracts and expansion of the group's lubricant and additive capabilities. Weak market conditions continue to challenge the division's minerals business, although the decline in margin has slowed. There was less good news for the group's industry and assurance division - continuing decline in oil and gas capital expenditure meant operating profit declined by a third.
Broker JPMorgan expects adjusted EPS of 133.73p for the full year, up from 132.08p in 2014.
INTERTEK (ITRK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 2,720p | MARKET VALUE: | £4.4bn | |
| TOUCH: | 2,665-2,668p | 12-MONTH HIGH: | 2,888p | LOW: 2,141p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 23 | |
| NET ASSET VALUE: | 492p* | NET DEBT: | 75% | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 1.02 | 120 | 51.8 | 16.0 |
| 2015 | 1.06 | 139 | 60.6 | 17.0 |
| % change | +4 | +16 | +17 | +6 |
Ex-div: 1 Oct Payment: 13 Oct *Includes intangible assets of £936m, or 580p a share | ||||
