TOP NEWS: Intertek maintains payout as earnings, cash top expectations

(Alliance News) - Intertek Group PLC on Tuesday posted a decline in annual profit, though ...

Alliance News 2 March, 2021 | 9:27AM
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(Alliance News) - Intertek Group PLC on Tuesday posted a decline in annual profit, though earnings and cash performance comfortably exceeded expectations.

Shares in Intertek were up 1.7% at 5,575.20 pence in London in morning trading.

For 2020, the London-based assurance, inspection, product testing and certification company reported a GBP343.9 pretax profit, down 23% from GBP445.1 million the year before.

Adjusted pretax profit fell less than expected, down 19% to GBP392.8 million from GBP483 million in 2019, having been estimated by market analysts to have fallen 25% to GBP364 million.

Revenue declined 8.4% to GBP2.74 billion from GBP2.99 billion in 2019, coming in below company-compiled consensus of GBP2.99 billion.

The firm said it "inevitably experienced some impact from disrupted client supply chains and factory closures" in its Products sector as well as reduces oil and gas demand, hurting its Caleb Brett business. Its Government & Trade Services business also suffered "challenging trading conditions".

The Resources business performance was "resilient" despite lockdown impact and the reduction of a clients' capital expenditure in the second half of the year. The Minerals business, however, managed "robust revenue growth".

The company maintained its dividend at 105.8 pence per share, consensus having been for this to be lowered to 102.8p.

Chief Executive Andre Lacroix said: "In 2020, we delivered resilient revenue of [GBP2,74 billion], down 6.7% at constant rates, with our earnings and cash performance well ahead of expectations. This has enabled us to deliver sustained returns to our shareholders with a full year dividend of 105.8p, in-line with 2019, reflecting our strong financial position and confidence in the future."

The company hit record adjusted free cash flow of GBP435.6 million up 10% year-on-year. Its financial net debt on December 31 was GBP419.9 million, down GBP209.5 million from the year before.

Statutory diluted earnings per share dropped 21% to 152.4p from 192.6p. Adjusted diluted EPS fell 20% to 170.9p from 212.5p and is before separately disclosed items such as amortisation of acquisition intangibles and restructuring costs.

He added: "In 2021, we will continue to benefit from the Covid-19 recovery and the attractive growth opportunities in our industry. We are confident that the group will continue to drive sustained value for our shareholders with year-on-year progress in revenue, margin and cash."

The CEO said Intertek is expecting the Total Quality Assurance market to grow faster post-Covid than it did pre-Covid with "new opportunities in many areas, including a greater focus on outsourcing".

By Anna Farley; annafarley@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Intertek Group PLC 6,054.00 GBX 0.46

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