Nothing Moody about Intertek

Demand from mining companies and oil majors saw Intertek's commodities division increase revenues by 12 per cent to £530m, while improved margins helped drove underlying operating profit up 23 per cent to £67m. Growing global trade meant cargo inspection proved especially popular, although Mr Hauser expects growth to moderate next year. Sales at the important consumer goods division rose just 4 per cent to £316m, while profits were flat and operating margins fell below 34 per cent. However, a significant improvement during the second half, particularly for the textile testing in Vietnam, Bangladesh and Turkey, is encouraging, as are signs of improving demand from the US and strength at the high-tech commercial and electrical division.

Management, meanwhile, is overjoyed at Moody, and its dilutive effect on margins in 2011 should soon reverse given the potential to recover back to pre-recession peaks and integration benefits to come. That's why broker JPMorgan Cazenove has upgraded its 2012 EPS forecast by 2 per cent to 125.2p (from 107.2p in 2011).