Shares in Intertek rose nearly 6 per cent after the company announced a 3 per cent rise in underlying pre-tax profits and a 13 per cent hike in the interim dividend.
The group provides a range of testing services from auditing and inspection through to quality assurance and certification, and operates through a network of over 1,000 laboratories in more than 100 countries. Business has been driven by greater legislation covering product safety and the group has also made a number of bolt-on acquisitions including the regulatory and safety testing business of CIBA Expert Services from BASF for around £5.4m. Revenue from that deal is expected to be around £20m in the first year alone.
Early in the second half, Intertek reached a long-term outsourcing agreement with industrial gases group Air Products. This is significant because only around 20 per cent of testing is currently outsourced, so there is plenty of potential work for Intertek to aim for.
Intertek's consumer goods division, its most profitable business, put in a solid performance considering that last year's figures were boosted by the introduction of new toy testing regulations. And the group's commercial and electrical testing and oil and chemical divisions reported decent revenue growth.
JPMorgan Cazenove has edged up its full-year adjusted pre-tax profit estimate to £210m, giving EPS of 90.1p (2009:£192m/81.5p), rising to £235m and 100p, respectively, in 2011.
| INTERTEK (ITRK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,668p | MARKET VALUE: | £2,659m | |
| TOUCH: | 1668-1670p | 12-MONTH HIGH: | 1,745p | LOW: 1,033p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 229p* | NET DEBT: | 62% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 622 | 87.7 | 37.5 | 8.2 |
| 2010 | 653 | 84.7 | 35.2 | 9.3 |
| % change | +5 | -4 | -6 | +13 |
Ex-div: 3 Nov Payment: 19 Nov *Includes intangible assets of £326m, or 205p a share | ||||
