Intertek Group PLC on Tuesday predicted a robust performance in 2024 as it flagged an improved dividend policy alongside a modest rise in annual pretax profit.
Shares in Intertek rose 6.2% to 4,907.00 pence each in London on Tuesday morning.
The London-based consumer product testing and certification agency said pretax profit in 2023 edged up 0.6% to £422.3 million from £419.8 million the year prior.
Diluted earnings per share increased by 2.8% to 183.4p from 178.4p.
Revenue climbed by 4.3% to £3.33 billion from £3.19 billion. This was in the middle of a company complied consensus of between £3.31 billion and £3.35 billion.
Like-for-like revenue increased by 3.4%, which Intertek said was the highest LFL growth in the last 10 years.
Intertek reported LFL growth of 8.2% in Corporate Assurance, Health and Safety, Industry and Infrastructure, and World of Energy combined. Consumer Products lagged with growth of 1.3%.
Chief Executive Andre Lacroix was upbeat looking ahead to 2024.
‘Based on our positive momentum, we expect the group will deliver a robust performance in 2024 with mid-single digit LFL revenue growth at constant currency, margin progression and a strong cash flow performance’.
‘We are on track to get back to our peak margin of 17.5% and beyond in the medium-term, capitalising on the revenue growth acceleration we are seeing for our ATIC solutions, our disciplined performance management and our investments in high growth and high margin segments,’ Lacroix commented.
In 2023, Intertek reported an adjusted operating margin of 16.6%, rising from 16.3% in 2022.
This confidence was reflected in a 5.6% increase to the annual dividend to 111.7p per share, compared with 105.8p last year. This was ahead of a consensus forecast dividend of 110.8p.
Intertek said it would increase the targeted dividend payout to around 65% of earnings from 2024.
The company said its cost reduction programme has delivered £13 million of savings in 2023, slightly more than its expectation for £7 to £8 million. An additional £10 million of savings is expected in 2024.
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