Intertek (ITRK) shares slid after the group reported a 1.8 per cent decline in first-half revenues. That reflected adverse foreign exchange rates, as well as a disappointing sales performance from both the trade and resources divisions. But at constant exchange rates, the group reported top-line growth of 3.9 per cent, a 40-basis point improvement in adjusted operating margins and a 6.4 per cent rise in adjusted operating profits. That was largely down to the products division, which grew sales by 6.4 per cent at constant currencies, margins by 70 basis points to 21.3 per cent and adjusted operating profits by 10.3 per cent to £172m.
The results came hot on the heels of a new acquisition announced last week. Intertek is buying Alchemy, a software solutions provider for the food industry, for $480m (£370m). Alchemy will bring with it more than 1,000 clients across the food sector, although Intertek believes the company’s solutions could be applied to a wide range of business lines. The deal is expected to be EPS accretive on a billings basis from the first full year of ownership.
Prior to these results, analysts at JP Morgan expected pre-tax profits of £454m for 2018, giving EPS of 195p, compared to £439m and 192p in 2017.
| INTERTEK (ITRK) | ||||
| ORD PRICE: | 5,522p | MARKET VALUE: | £ 8.91bn | |
| TOUCH: | 5,520-5,524p | 12-MONTH HIGH: | 6,084p | LOW: 4,526p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 483p* | NET DEBT: | 69% | |
| Half-year to 30 June | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 1.37 | 191 | 83.5 | 23.5 |
| 2018 | 1.35 | 197 | 84.9 | 31.9 |
| % change | -2 | +3 | +2 | +36 |
| Ex-div: | 04 Oct | |||
| Payment: | 19 Oct | |||
| *Includes intangible assets of £771m, or 478p a share | ||||
