A non-cash impairment charge of £577m pushed Intertek (ITRK) to a net earnings loss in 2015, hardly an ideal maiden annual result for boss André Lacroix, who took over the reins last May. The charge is a reflection of continued uncertainties in the global oil and gas markets, as the inspection and certification group bore the charge on past acquisitions with exposure to energy markets.
However, Intertek did record solid growth in its consumer division, complemented by margin expansion in its commodities, chemicals and pharmaceuticals businesses as a result of restructuring measures and operating leverage effects. Disregard one-off items, group operating profit was up 6 per cent to £343m, helped along by a 20 basis point uptick in the underlying margin.
Above all, these results point to a renewed focus on capital discipline, perhaps an indication that management views a hard road ahead. Intertek delivered operating cash flow of £466m, while the annual cash conversion rate came in at 136 per cent, although it's worth noting that year-end receivables were in advance of the 2014 total.
JPMorgan Cazenove gives adjusted pre-tax profit of £336m, leading to EPS of 146p, against £319m and 141p, respectively, in 2015.
INTERTEK (ITRK) | ||||
---|---|---|---|---|
ORD PRICE: | 2,953p | MARKET VALUE: | £4.77bn | |
TOUCH: | 2,952-2,956p | 12-MONTH HIGH: | 3,030p | LOW: 2,296p |
DIVIDEND YIELD: | 1.8% | PE RATIO: | na | |
NET ASSET VALUE: | 193p* | NET DEBT: | 228% |
Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2011 | 1.80 | 213 | 87.0 | 33.7 |
2012 | 2.10 | 257 | 108 | 41.0 |
2013 | 2.20 | 282 | 124 | 46.0 |
2014 | 2.09 | 252 | 110 | 49.1 |
2015 | 2.17 | -308 | -224 | 52.3 |
% change | +3 | - | - | +7 |
Ex-div: 19 May Payment: 3 Jun *Includes intangible assets of £632m, or 391p a share |