Intertek’s (ITRK) adjusted operating profit slumped by almost a third to £168.2m in the first half, as coronavirus disrupted global supply chains and retail operations.
The testing specialist’s trade business was hit the hardest: like-for-like sales in the segment dropped by a tenth to £294.7m, pushing its operating margin down by 6.7 percentage points.
Interk’s core products division posted double digit declines in both its softlines and hardlines businesses, as they were hit by supply chain disruptions in China and India, as well as the closures of some retailers in Western Europe and North America. The building and construction business was the only one in the division to post revenue growth, although activity in the market lulled in the second quarter due to lockdown restrictions.
The impact of coronavirus was less pronounced in the resources division, which accounts for just under a fifth of the overall top-line. Like-for-like revenues dipped 2.1 per cent, although two of the three businesses within the segment achieved growth.
Looking ahead, Intertek has not issued guidance for the remainder of the year as it faces continued uncertainty around lockdown restrictions. It did hint, however, that it expects the second half to outperform numbers from the first.
Analysts at UBS forecast adjusted EPS of 167.56p in 2020, rising to 212.36p in 2021.
| INTERTEK (ITRK) | ||||
| ORD PRICE: | 5,528p | MARKET VALUE: | £ 8.9bn | |
| TOUCH: | 5,528-5,534p | 12-MONTH HIGH: | 6,170p | LOW: 4,164p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 34 | |
| NET ASSET VALUE: | 597p* | NET DEBT: | 89% | |
| Half-year to 30 Jun | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 1.44 | 206 | 89.1 | 34.2 |
| 2020 | 1.33 | 131 | 59.1 | 34.2 |
| % change | -8 | -37 | -34 | - |
| Ex-div: | 17 Sep | |||
| Payment: | 08 Oct | |||
| *Includes intangible assets of £1.2bn or 750p a share | ||||
