Intertek (ITRK) is capitalising on two concurrent trends – globalisation increasing the complexity of supply chains and rising regulation governing corporate safety, quality and sustainability. As companies continue to outsource their testing, inspection and certification (TIC) needs, the group saw constant-currency organic growth accelerate across 2019, from 3 per cent in the first half of the year to 3.3 per cent by the year-end. With a 0.1 percentage point improvement in the margin to 17.2 per cent, adjusted operating profit rose 5 per cent at constant currencies to £513m.
Prior to the coronavirus outbreak, the group was anticipating “good” organic revenue growth across its divisions and “moderate” margin expansion this year. It has now warned that 2020 will be impacted by the “temporary disruption” to clients’ supply chains in China as well as any disturbance to global trade. Intertek says it is too early to provide more specific guidance, but to give an idea of its level of exposure, China is responsible for around a fifth of revenue.
Shore Capital forecasts adjusted pre-tax profit of £453m and EPS of 197p in 2020, down from £485m and 213p last year.
| INTERTEK (ITRK) | |||||
| ORD PRICE: | 5,426p | MARKET VALUE: | £8.7bn | ||
| TOUCH: | 5,424-5,428p | 12-MONTH HIGH: | 6,178p | LOW: | 4,583p |
| DIVIDEND YIELD: | 1.9% | PE RATIO: | 30 | ||
| NET ASSET VALUE: | 594p* | NET DEBT: | 89%** | ||
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) | |
| 2015 | 2.17 | -308 | -224 | 52.3 | |
| 2016 | 2.57 | 347 | 159 | 62.4 | |
| 2017 | 2.77 | 393 | 179 | 71.3 | |
| 2018 | 2.80 | 405 | 177 | 99.1 | |
| 2019 | 2.99 | 445 | 195 | 105.8 | |
| % change | +7 | +10 | +10 | +7 | |
| Ex Div: | 21-May | ||||
| Payment: | 11-Jun | ||||
| *Includes intangible assets of £1.2bn, or 722p a share | |||||
| **Includes £246m in lease liabilities | |||||
