Some companies offer so many services that it’s easy to lose track. Intertek (ITRK) falls into this category. The quality assurance specialist started life 130 years ago, certifying grain cargoes and ensuring the safety of Thomas Edison’s inventions. Now, it tests everything from children’s toys and power stations to electric cars and cosmetics. As the world becomes increasingly regulated, however, the group’s enormous footprint and eclectic customer base are worth paying attention to.
- Regulation on the rise
- Strong cash flow
- Imposing market position
- Diverse client base
- Struggling resources division
- Looming debt deadline
This doesn't mean the business defies economic gravity. During the pandemic, mass disruption to global supply chains and retail operations hit Intertek’s performance, and reported pre-tax profit fell by a quarter in 2020 to £344mn, before rebounding to £413mn in 2021. The knock also caused its dividend to plateau at 105.8p per share, after a decade of increases. In the wake of Covid-19, however, growth is expected to accelerate: analysts think sales will exceed £3bn by December 2022, while adjusted pre-tax earnings are due to rise to £489mn (see table below).