The discovery of horse meat in processed food has led to a windfall for testing and quality control business Intertek (ITRK), which has reported record profits and a healthy 22 per cent dividend increase for 2012. Chief executive Wolfhart Hauser says there are no signs that growth is slowing, not least because the horse meat scandal demonstrates how manufacturers need visibility over their supply chains.
Double-digit revenue growth was boosted by the Moody acquisition in 2011, but even organic growth was a healthy 8.6 per cent. Every division delivered growth in revenue and profits. The industry and assurance unit was driven by the energy and agriculture sectors; combined with cost savings from the Moody acquisition these pushed up adjusted operating profits by 52 per cent to £77.4m. The Australian mining slowdown couldn't hold back the commodities division either.
Intertek continues to add bolt-on deals and announced the expansion of its consumer goods operations into Brazil through the acquisition of a toy testing facility. Cash flow rose by 10 per cent to £345m, and net debt was £30m lower at £551m. JPMorgan Cazenove raised its pre-tax profit estimate to £359m, giving EPS of 154p (from £308m and 131p in 2012).
INTERTEK GROUP (ITRK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 3,379p | MARKET VALUE: | £5.43bn | |
| TOUCH: | 3,375-3,383p | 12-MONTH HIGH: | 3,509p | LOW: 2,249p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 392p* | NET DEBT: | 84% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 1.00 | 139 | 59.5 | 20.8 |
| 2009 | 1.24 | 169 | 72.4 | 25.5 |
| 2010 | 1.37 | 190 | 80.7 | 28.1 |
| 2011 | 1.75 | 213 | 86.8 | 33.7 |
| 2012 | 2.05 | 257 | 108.2 | 41.0 |
| % change | +17 | +20 | +25 | +22 |
Ex-div: 22 May Payment: 7 Jun Includes intangible assets of £823m, or 512p a share. | ||||
