Intertek Lifts Profits by 19%


LONDON -- The shares of Intertek climbed 10 pence to 3,390 pence during early trade this morning after the FTSE 100 member lifted its annual profits by 19% to £335 million.

The profit jump accompanied full-year results that showed sales up 17% to £2.1 billion and a dividend raised 17% to 41 pence per share.

The improved performance was supported partly by acquisitions, notably the £450 million purchase of Moody International during 2011 and six smaller deals that totaled £40 million last year.

Excluding acquisitions, Intertek said underlying sales and profits advanced 9% and 11% respectively.

Intertek operates more than 1,000 laboratories around the world and tests items as diverse as car batteries, fire doors and children's toys for quality and safety.

William Hauser, Intertek's chief executive officer, said: "We are pleased to report another year of strong growth across our diverse geographic and industry portfolio as we continue our strategy of delivering global quality solutions. These results underline the resilient nature of the growth drivers in our chosen quality markets and our ability to capture growth and deliver value to shareholders through acquisitions and organic investment."

Hauser also said the company ought to continue to deliver high single-digit organic revenue growth as well as further margin improvements.

Today's results extended what has been a superb performance from Intertek during the banking crash and subsequent recession. Indeed, between 2007 and 2011, the group's revenues surged 125% to £1.75 billion while adjusted operating profits soared 130% to £281 million.

Such progress has helped the shares deliver wonderful returns, with the price rising more than fourfold since their sub-700 pence lows of 2008.

Based on today's results, Intertek is valued at 26 times profits and offers a 1.2% dividend yield.

Of course, whether you think that rating, today's results, the track record and the general prospects for quality assurance testing all combine to make Intertek a buy remains up to you.

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