Intertek Group PLC
25 June 2007
25 June 2007, 7:00am (UK)
Pre-close Trading Statement
Intertek Group plc ('Intertek'), the leading international provider of quality
and safety services to a wide range of industries, today reports on trading
ahead of entering the close period for the six months ending 30th June 2007. The
interim results will be announced on Monday 3rd September 2007.
The Group is expected to perform well in the first half. Growth in global trade
and increased demand for quality and safety services internationally continue to
stimulate good growth in Intertek's industries and service lines. Through a
strategy of offering added-value services to customers' products and processes
and supporting them in their global trade, Intertek is continuing to gain from
these positive industry trends.
Consumer Goods continues to perform well in all major lines, with the increased
textiles, toys and hardlines exports from China and Asia to the West driving the
growth. Last year the division benefited from an increase in testing from the
new European Union legislation on Restriction of Hazardous Substances (RoHS).
Subsequent limited enforcement of the legislation has reduced RoHS testing such
that the divisional margin in the first half will be slightly lower compared to
last year.
The Commercial & Electrical division is performing well in all three global
regions and has successfully increased market share and recognition of the ETL
mark in the US over the period. There has been a turnaround in the automotive
components testing business which is no longer declining and is now showing
positive growth, although is still below the divisional average. The division is
expected to benefit from increased testing and certification for energy
efficiency, particularly on lighting and electrical products manufactured in
Asia. The recently acquired business including the ASTA and BEAB certification
marks further strengthens Intertek's existing mark portfolio and ability to
provide manufacturers with seamless global market access.
The strong performance in the Oil, Chemical and Agri division has been driven by
high demand and trade in petroleum products, alongside the growth in biofuels
and ultra low sulphur diesel and the continued success of the outsourcing
strategy in the analytical services sector. Analytical services now account for
over 50% of the division by revenue. Acquisitions in the upstream oil and gas
market, minerals and pharmaceutical sectors this year are expanding the service
range to existing customers and bringing new business into the network. Good
market conditions and increased testing volumes in higher margin analytical
services will result in another period of positive margin up-lift in the first
half.
The Government Services division is growing well on an underlying basis. As
anticipated it will report an overall decline in revenue and profit due to the
inclusion of three months revenue and profit from the discontinued Nigeria
contract in 2006. There are good prospects for continuing the diversification of
the revenue stream away from pre-shipment inspection.
As previously announced, the level of external and internal investment has
increased and over £50 million has been spent on six acquisitions so far this
year. All of these are bringing additional services into the group or expansion
into new regions. The Group also continues to develop new services internally
and, by the end of the first half of 2007, approximately £1 million will have
been spent. Internal and external investments will ensure new growth
opportunities are captured.
With approximately 80% of the Group's earnings in US dollar and US dollar
related currencies, and the US dollar being currently 11% weaker against
sterling than this time last year, on translation the results will be negatively
impacted in the first half.
The Board is pleased with the continuing good progress the group is making in
capturing the growth in the industry and expect the results for the year to be
in line with expectations.
-ends-
Contacts
Aston Swift
Telephone: +44 (0) 20 7396 3400
aston.swift@intertek.com
Richard Mountain / Susanne Yule, Financial Dynamics
Telephone: +44 (0) 20 7831 3113
richard.mountain@fd.com / susanne.yule@fd.com
Notes to Editors
ABOUT INTERTEK
Intertek is the leading international provider of quality and safety services to
a wide range of global and local industries. Partnership with Intertek brings
increased value to customers' products and processes, ultimately supporting
their success in the global market place. Intertek has the experience,
expertise, resources and global reach to support its customers through its
network of 930 laboratories and offices and over 18,000 people in 109 countries
around the world.
This information is provided by RNS
The company news service from the London Stock Exchange
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