Intertek Group PLC
02 December 2003
2 December 2003
Intertek Group plc ('Intertek')
Pre Close Trading Statement
Intertek, the global testing, inspection and certification company, today
reports on trading ahead of entering the close period for the financial year to
31 December 2003. The preliminary results will be announced on Monday 8 March
2004.
Based on current results at constant exchange rates, turnover in the second half
is showing similar growth to the first half of 2003. However operating profit is
showing lower growth. The recent further weakness in the US dollar is reducing
the results at actual exchange rates such that management expects operating
profit for the full year to be marginally below the figure for the previous
year. The earnings per share (before exceptional items and amortisation) are
expected to remain within the range of analysts' forecasts.
Labtest's turnover and profit continue to benefit strongly from the increased
volumes of textile testing in Hong Kong, China and the rest of Asia, as well as
increasing regulatory standards on toys and other products sourced from Asia.
Caleb Brett oil cargo inspection continues to operate in a competitive
environment but performance has improved from the first half of the year. The
outsourcing side of the business is growing well, with new contracts being won.
In ETL SEMKO, safety testing and certification of electronic and electrical
products is growing well in Asia. Performance testing in America is producing
good results but the telecoms equipment testing in Europe and America has still
not yet recovered from the downturn that started in mid 2001. In order to
improve the co-ordination and cross selling on the government standards
programmes in Saudi Arabia and Kuwait and to reduce overheads, the ETL SEMKO and
FTS divisions are being merged under the leadership of Rob Dilworth. The results
of the two divisions will continue to be reported separately.
In FTS, the Nigerian Government has suspended all inspection work performed for
it by Intertek with effect from late November. As previously reported, the
Nigerian contract was expected to continue at least until the end of 2003
although the status beyond this date was uncertain. Nigeria accounts for
approximately 2.5% of Intertek's turnover, so there will be a small reduction in
the Group's operating profits in 2003 as a result of the suspension of the
contract. The division is being restructured to compensate for the reduced
workload. The recent contracts with Venezuela, Kuwait and Malawi are expected to
make up for the lost turnover, but they are still incurring start up costs and
are less profitable than Nigeria.
The restructuring of the ETL SEMKO and FTS divisions is expected to result in
exceptional charges of approximately £3.3 million on which there will be a two
year payback.
Exceptional items
In the second half, approximately £1.1 million of income arising from FTS
government contracts relating to previous periods will be recognised as
exceptional income. Exceptional income of approximately £1.4 million will also
be recognised in respect of the liabilities recovered in relation to the
Environmental Testing division, closed in 1998. As stated above, the
restructuring of ETL SEMKO and FTS will result in an exceptional cost of £3.3
million.
For further information, please contact
Aston Swift, Treasurer and Investor Relations
Telephone: +44 (0) 20 7396 3400 aston.swift@intertek.com
Katie Macdonald-Smith, Tulchan Communications
Telephone: +44 (0) 20 7353 4200
kmacdonald-smith@tulchangroup.com
Corporate website: www.intertek.com
High resolution images of Intertek Group plc businesses are available to
download, free of charge from www.vismedia.co.uk.
About Intertek
Intertek is a leading international testing, inspection and certification
organisation which assesses customers' products and commodities against a wide
range of safety, regulatory, quality and performance standards and in some
cases, certifies the management systems of customers. Intertek has over 270
laboratories with more than 11,000 people around the world and is increasingly
undertaking outsourced testing work for its customers.
This information is provided by RNS
The company news service from the London Stock Exchange
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