- Like-for-like sales growth 7.1% highest in 10-years
- Has been growing sustainably over the past decade
- Confident in achieving 17.5% margin
Global testing and quality assurance specialist Intertek (ITRK) topped the FTSE 100 gainers after posting its highest annual like-for-like sales growth in a decade and giving a positive outlook.
The shares jumped around 7% to a new 12-month high taking gains over the last year to 17% compared with a 4% loss for the FTSE 100 index.
Sales for the year to 31 December grew 7.1% in constant currencies to £3.29 billion while operating profit increased 10.9% to £551 million equating to a 16.6% margin on sales, up from 16.3% in 2022.
Return on invested capital which is calculated by dividing pre-tax profit by invested capital increased to 20.5% compared with 18% in 2022.
WHAT DID THE COMPANY SAY?
In his annual letter Chief executive Andre Lacroix said:’ We have delivered our highest ever cash from operations of £749m resulting in our net debt declining by £127m to £611m. We have a strong balance sheet giving us the ability to invest in growth.
‘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 (Assurance, testing, inspection, and certification) solutions, our disciplined performance management and our investments in high growth and high margin segments.
DECADE OF VALUE CREATION
Looking back on its achievements between 2014 and 2023 the company said it has delivered strong value for all stakeholders and sustainable growth.
Sales have grown 59% equating to a CAGR (compound annual growth rate) of 5.3% a year while operating profit is up 81% for a CAGR of 6.8%. The company has increased EPS (earnings per share) and dividends by a CAGR of 6% and 9.6% respectively.
Looking ahead the company is targeting mid-single digit like-for-like sales growth and said it is ‘confident’ of achieving a 17.5% operating margin in the medium term.
The cost saving programme based on streamlining operations delivered £13 million in 2023 against expectations of £7 million to £8 million. The firm expects to deliver a further £10 million of savings in 2024.
The company also expects to implement some price increases again in 2024.
LEARN MORE ABOUT INTERTEK
