- Underlying sales growth up 7.3% in first 10-months
- Full year results expected to meet expectations
- Recent acquisitions performing well
Global quality assurance provider Intertek (ITRK) said it was on track to meet market expectations for the year after delivering 7.3% underlying sales growth in the first 10-months.
The company confirmed it expects to deliver mid-single digit like for like revenue growth and margin progression alongside ‘strong’ free cash flow for the 12-months to 31 December.
Investors welcomed the positive outlook with the shares topping the FTSE 100 leader board after up jumping 2.4% to £39.21. The shares are down 4% for the year, compared with a 1% fall in the blue-chip index.
WHAT DID THE COMPANY SAY?
Chief executive Andre Lacroix commented: ‘The Group has delivered 7.3% revenue growth on a YTD basis at CCY, (constant currencies) driven by 8.5% LFL revenue growth in Corporate Assurance, Health and Safety, Industry and Infrastructure, and the World of Energy combined, while LFL for Consumer Products was 1.1%.
‘Recent acquisitions in high-growth, high-margin segments are performing well, benefiting from the scale-up opportunities in our global network.
Reported revenues increased 5% to £2.76 billion implying a 2% currency headwind. Like for like growth was broad-based across the group’s five divisions with Energy a standout performer generating 8.7% growth.
The division accounts for around a fifth of total revenues and is benefiting from higher testing activities for biofuels.
At the other end of the spectrum the consumer products division representing around 29% of total revenues booked a 2.7% fall (up 1% on an underlying basis).
The company said it saw a slowdown in new product development reflecting inventory reductions by US and European retailers. Full year underlying growth in consumer products is expected to be low single digit.
EXPERT VIEW
Shore Capital’s Robin Speakman said: ‘Little information has been disclosed on the margin performance other than to confirm that the indicated progression is being achieved.
‘We have been sceptical as to what margin can be achieved in the medium-term, given active competition in the markets for services around testing and assurance.
‘Intertek has set itself a robust challenge of accelerating revenue growth with enhanced margins and we expect delivery to become more visible through FY24F. Clearly the focus is set to be firmly on margin progression as we now move towards the new year and to delivery and sustaining performance.’
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