Intertek Group plc Revenue & Profits Hit By Stronger Pound

Intertek Group plc (LON:ITRK) says it’s well placed to deliver growth in coming years.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

intertekIntertek (LSE: ITRK) —  the multinational inspection, product testing and certification company — has risen 1% so far this morning, following publication of  its half year results to the 30 June 2014.

Revenue fell 6.9% on a reported basis, although on a constant-currency basis adjusted revenue was up 2.9%, at £1,024.3m. Similarly, reported pre-tax profit fell 6.3%, but rose 6.7% on an adjusted constant-currency basis, to £140.9m. Intertek’s operating margin firmed-up 30 basis points, to 14.9%.

A fall in both revenue and profit, however measures, in the company’s ‘Industry & Assurance’ division was attributed to the decision to exit certain low value contracts, together with the phasing of work on customers’ energy capital projects.

Intertek reported “good growth” in both its ‘Commercial & Electrical’ and ‘Consumer Goods’ divisions, with “particularly strong growth” seen in the latter division’s newer sourcing markets, such as India and Turkey.

The company’s “Commodities” business reported “good progress” in in oil cargo in Asia and US shale activities, but saw a double-digit decline in minerals, mainly owing to the Indonesian ore export ban. Intertek says it expects the mineral market to remain challenging for the rest of 2014.

On a constant-currency basis, diluted earnings per share were up 8.6%, at 61.2p, and the board is recommending an interim dividend of 16p per share, an increase of 6.7% over last year’s.

Commenting on the results, CEO Wolfhart Hauser said

Intertek delivered good growth in our product-related divisions, but continued to see headwinds in our minerals and energy-related businesses. 

“Looking further ahead, our strategic choice of portfolio positions Intertek to benefit from attractive long term structural growth drivers. Our product divisions are strongly leveraged to increasing middle class demand for quality in emerging markets, expanding regulation and product variety. Our energy products and infrastructure businesses enable Intertek to take advantage of the long-term growth in energy demand. Through these strategic positions and long-term trends Intertek is well placed to deliver high single digit organic revenue growth over the coming years.”

Newer shareholders will be hoping that Hauser is right. At 2,558p, Intertek’s share price is almost 20% down so far in 2014, in which time the FTSE 100 has declined less than 1%.  But those who’ve been holding over the longer term have seen the company’s share price soar by 145% over the past five years, compared with a 45% gain by the FTSE 100 index.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Jon Wallis has no position in any shares mentioned. The Motley Fool has recommended Intertek.

More on Company Comment

Hand of person putting wood cube block with word VALUE on wooden table
Company Comment

Value has been building behind the Diageo share price

Despite the business growing, the Diageo share price first reached its current level just over 19 months ago and hasn't…

Read more »

Older couple walking in park
Investing Articles

5 stocks to buy for high and rising dividend income

I can see a host of shares to buy on the FTSE 100 offering me exceptional levels of income. Here…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I don’t care if FTSE 100 shares fall further, I’m buying them today

I'm happy to go shopping for FTSE 100 shares today, even though I accept that they could have further to…

Read more »

Happy young female stock-picker in a cafe
Investing Articles

Rolls-Royce shares are down 18% in a month and I’m finally going to buy them

Investors who bought Rolls-Royce shares have been repeatedly disappointed, but I'm willing to take a chance on them before they…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

How I’d invest £10k in a Stocks and Shares ISA today

Now looks like a good time to buy cheap FTSE 100 shares inside a Stocks and Shares ISA. These are…

Read more »

Black father holding daughter in a field of cows
Investing Articles

Today’s financial crisis is the perfect moment to buy cheap shares

I'm building a portfolio of FTSE 100 stocks by purchasing cheap shares whenever I see an opportunity. There's a good…

Read more »

Long-term vs short-term investing concept on a staircase
Investing Articles

I’d buy Tesco shares in October to bag their 5.4% yield 

Tesco shares have fallen lately but I think this makes them attractively valued for a dividend stock I would aim…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

I would do anything to hold Diageo in my portfolio (but I won’t do that)

Diageo is one of my favourite stocks on the entire FTSE 100 and I'd love to hold it, but one…

Read more »