Intertek Group Plc Closes Strong First Half Of 2013

International quality and safety services provider Intertek Group (LSE: ITRK) posted strong first-half numbers today.

Highlights for the six months ending 30 June include:

  • Revenue growth of 9.5%, reaching £1.09bn, with all divisions contributing to growth
  • Operating profits up 4% to £158m, driven by Consumer Goods and Industry & Assurance, with weakness in the minerals sector and across the European market
  • Diluted earnings per share up 6.4% to 61.9p

Wolfhart Hauser, Intertek’s Chief Executive Officer, commented:

“Intertek delivered good revenue growth in the first half against a very strong performance last year. We saw challenging market conditions in our minerals business and across Europe, but produced robust growth in a number of other areas, most notably in China, India and the Middle East.

“Looking ahead, revenue growth for the Group is expected to improve in the second half from the level reported in the first half. The second half margin is anticipated to be in-line with the corresponding period last year, with year on year underlying margin progression to resume from 2014.

“Intertek’s structural growth drivers and globally diversified services provide a strong foundation for long term value creation. We continue to diversify our quality and safety services and are working to further develop in Asia, the Middle East, South America and India where we have potential for very strong growth.”

In the first half, Intertek made organic investments of £61m, including £9m spent on bolt-on acquisitions. The company says it evaluating more bolt-on acquisitions for the second half of the year.

Intertek is also continuing its restructuring programme to reduce costs and exit underperforming businesses. In the past six months, it has disposed of two small loss-making businesses in Europe. Restructuring costs were £4.1m in the first half, bringing the total for the programme to £18.3m, with further projects scheduled to be completed this year.

Investors will no doubt want to keep an eye on Intertek’s ability to expand margins from here, as it is spending money winding down underperforming businesses and targeting more acquisitions.  

But for now, investors holding Intertek for the dividend will be pleased, as the company announced a dividend increase of 15.4% to 15p per share, to be paid on 15 October.

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> Jill does not own any shares mentioned in this article.