Intertek Testing Services PLC
15 May 2003
Intertek Testing Services plc ('Intertek')
Trading Statement
Following the Annual General Meeting at 10.00am today, Intertek will hold an
Investor Day for investors and analysts, starting at 1.15pm. The executive
management, including the head of each division, will provide information on
Intertek's business and opportunities.
We currently believe that trading for the year will be in line with
expectations, despite reduced activity in some areas in the first four months of
the year and despite the continuing weakness of the US dollar and US dollar
related currencies, which continue to have a direct translation effect on
approximately 80% of the Group's operating profits. Intertek continues to
benefit from the wide variety of products being made, the shortening product
life cycles, the introduction of new safety standards, the rising demand for
quality and performance, and the expanding sourcing from Asia and other Far East
areas. The testing and inspection of consumer goods has been especially strong.
Trading has remained unaffected by the spread of the SARS virus, although any
substantial reduction in new orders won by the Chinese manufacturers that we
service would have a detrimental effect on the business.
Labtest
The testing and inspection of textiles, toys and other consumer goods continues
to grow well, especially in China and other parts of Asia.
In order for Intertek to develop its own system certification business in Asia,
Labtest has sold its 50% shareholding in its system certification joint venture
in China, BSI Pacific Limited (BSIP), to the other shareholder, the British
Standards Institution for a cash consideration of £6.8 million. In 2002, BSIP
had sales of £6.1 million and Labtest's 50% share of BSIP's operating profit was
£0.7 million.
Caleb Brett
Testing outsourced by oil and chemical companies was 23% of this division's
turnover in 2002. New outsourcing work is being won and an increasing number of
new opportunities are being pursued.
The inspection and testing of oil and chemical cargoes was 77% of this
division's turnover in 2002. This part of the business has seen low volumes of
shipments in the year to date, mainly due to the Iraqi situation as a result of
which traders have carried out little activity and oil stocks have been very
low.
The division is being restructured so that the people and resources are more
focused on winning contracts in outsourced testing which yields higher profit
margins than the cargo business. In particular, cargo offices with low returns
are being closed or consolidated, and some laboratories are being merged so that
they have more testing capabilities and can attract further outsourced testing.
ETL SEMKO
In ETL SEMKO, the testing and certification of electronic and electrical
products and building products continues to expand, especially in Asia.
Telecommunications testing volumes in the USA and Europe have not yet recovered
from the downturn that started in mid 2001. In the testing of air conditioning
equipment, there was a revision to the performance standard which resulted in
work being delayed in the first few months of the year.
FTS
Shipments to Saudi Arabia and Nigeria are down on the previous year because of
the political situations in those regions. The standards programme with the
government of Kuwait commenced in March 2003 but it is still in a start up
phase.
Exceptional Items
Approximately £1.7 million of income arising from FTS government contracts
relating to previous periods will be recognised as exceptional income in the
half year to 30 June 2003. Exceptional income of approximately £0.9 million has
been recovered from insurers in respect of the liabilities relating to the
Environmental Testing division, closed in 1998. The restructuring of the Caleb
Brett division is expected to result in an exceptional charge of approximately
£2.7 million in the half year.
Notes to Editors
Intertek is a leading international testing, inspection and certification
organisation which assess 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 250
laboratories with more than 10,000 people around the world and is increasingly
undertaking outsourced testing work for its customers.
For further enquiries, please contact:
Aston Swift, Group Treasurer and Investor Relations 020 7396 3400
David Trenchard, Tim Lynch, Tulchan Communications 020 7353 4200
For further information, visit our website at www.intertek.com
This information is provided by RNS
The company news service from the London Stock Exchange
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