Interim Management Statement

RNS Number : 3866X

Intertek Group PLC

19 November 2014

 



Stock Exchange Release             

19 November 2014, 7.00am London, UK 

Interim Management Statement

Intertek Group plc (Intertek or Group), a leading quality solutions provider to industries worldwide, today releases its Interim Management Statement for the period from 1 July to date. Where stated, financial results are for the period from 1 January to 31 October 2014 ("period"). All comparative comments in this statement reflect comparisons with the corresponding period during 2013. The Group's full year results to 31 December 2014 will be announced on 2 March 2015.

Group Performance

·     Group revenue increased 2.5% at constant exchange rates.

·     Organic revenue growth declined -0.7%.

·     Organic revenue growth excluding the exit from certain low-value Industry contracts was 1.2% an increase from 1.0% at the half year.

·     Acquisitions made in 2013 and 2014 contributed 3.2% to Group revenue.

·     Group revenue declined -5.1% at actual exchange rates as Sterling appreciated against all of the Group's currencies.

Full Year Outlook

·     Organic revenue growth rate for 2014 expected to be similar to that in the period.

·     2014 operating margin expected to be broadly stable on full year 2013.

Divisional Performance

In the Industry & Assurance division, the Group accelerated its programme of exiting certain low-value Industry contracts into the second half of 2014 which reduced Group organic revenue growth by 1.9% in the period. The underlying market conditions in the oil and gas infrastructure technical inspection business remained negative and we saw further delays in capex-related work in the period. Opex-related services, which represent a smaller part of the division, have seen positive growth. We have also seen good demand for food and agri services continuing, and this has strengthened in the second half. Our business assurance certification and auditing services, which are used by customers in a wide range of product and process industries, are delivering strong growth. 

As anticipated, the Commodities division continued to reflect the weak market conditions for minerals, including the impact of the Indonesian nickel export ban this year. The oil and gas cargo business delivered good growth in many markets, but overall growth was moderated by the weak environment in Europe. 

Performance in the Consumer Goods and Commercial & Electrical divisions was driven by textiles, with strong growth in newer sourcing countries such as India, Vietnam and Turkey in the period. Transport technologies continued to deliver very high growth rates and electrical business lines delivered solid growth. Toys was impacted by stronger comparables from the introduction of the EU Toy directive that came into force in the middle of 2013.

The Chemicals & Pharma division experienced weaker demand for chemicals services in the period with variable trading in Europe in particular. Demand for the Group's services in Asia and the Middle East developed positively.  

Investment & Financial Position

Since the half year Intertek has acquired two businesses for a total cash consideration of £3m: the analytical division of QPS Bioserve, a food and agricultural analytical testing business in Southern India; and ScanBi Diagnostics, a Swedish company providing analysis to the agriculture, food and feed industries. Total acquisition expenditure in the year to date was £43m.

The Group has recognised a £15m restructuring charge in the period and has exited some under-performing sites in response to market conditions. The Group continues to actively manage its portfolio to deliver sustainable growth in the medium and long term.

There has been no material change to the Group's financial position in the period since the last reported balance sheet date of 30 June 2014.

Directorate

In September, the Group announced the appointment of André Lacroix as Chief Executive with effect from 16 May 2015.

Wolfhart Hauser, Chief Executive Officer of Intertek, commented:

"While good growth continues in most of our product-related businesses, the underlying weak market conditions for our commodities and oil and gas capex-related businesses have not improved in the second half. As a result, we now expect the 2014 full year organic revenue growth rate to be similar to that in the period and to hold our margin broadly stable with that of 2013. Looking to 2015, we expect Group revenue growth to strengthen, led by our product-related businesses, but remain cautious about our oil and gas capex end-markets."

-ends-

Contacts:

Sarah Ogilvie, Intertek Group plc  -  Telephone: [phone]          

[e-mail]

Richard Mountain, FTI Consulting - Telephone: [phone]

[e-mail]

About Intertek

Intertek is a leading quality solutions provider to industries worldwide.  From auditing and inspection, to testing, training, advisory, quality assurance and certification, Intertek adds value to customers' products, processes and assets.  With a network of more than 1,000 laboratories and offices and over 36,000 people in more than 100 countries, Intertek supports companies' success in a global marketplace. Intertek helps its customers to meet end users' expectations for safety, sustainability, performance, integrity and desirability in virtually any market worldwide.  Intertek Group plc (LSE: ITRK) is listed on the London Stock Exchange and is a constituent of the FTSE 100 index. Visit www.intertek.com

This Interim Management Statement is prepared for and addressed only to the Company's shareholders as a whole and to no other person. The Company, its directors, employees, agents or advisers do not accept or assume responsibility to any other person to whom this Interim Management Statement is shown or into whose hands it may come and any such responsibility or liability is expressly disclaimed. Statements contained in this Interim Management Statement are based on the knowledge and information available to the Company's Directors at the date it was prepared and therefore the facts stated and views expressed may change after that date. By their nature, the statements concerning the risks and uncertainties facing the Company in this Interim Management Statement involve uncertainty since future events and circumstances can cause results and developments to differ materially from those anticipated. To the extent that this Interim Management Statement contains any statement dealing with any time after the date of its preparation such statement is merely predictive and speculative as it relates to events and circumstances which are yet to occur. The Company undertakes no obligation to update these forward-looking statements.

 

END

 

 

IMSBIBDBUSBBGSI