Interim 2005 Results
05 Sep 2005
Intertek Group plc (“Intertek”), the global testing, inspection and certification company, today announces its interim results for the half year to 30 June 2005.
FINANCIAL HIGHLIGHTS
Revenue £272.3m
Up 14.5% at actual exchange rates
Up 15.7% at constant exchange rates
Up 13.2% organically (Note 1)
Operating profit £43.5m (Note 2)
Up 11.5% at actual exchange rates
Up 13.3% at constant exchange rates
Up 7.9% organically (Note 1)
Up 9.1% organically, excluding IFRS share option charge (Note 1)
Operating margin (Note 1) 16.0% Down from 16.3%
Operating cash flow £20.0m Down 34.2% from £30.4m
Profit before tax £38.5m Up 4.3% from £36.9m
Earnings per share (Note 3) 18.7p Up 14.0% from 16.4p
Basic earnings per share 17.0p Up 4.3% from 16.3p
Interim dividend per share 3.9p Up 14.7% from 3.4p
1. At constant exchange rates
2. Excluding amortisation of intangibles £0.8m (H1 04: £0.3m) and goodwill impairment £2.0m (H1 04: £nil)
3. Diluted adjusted earnings per share based on profit before amortisation of intangibles and goodwill impairment
CHIEF EXECUTIVE OFFICER, WOLFHART HAUSER commented:
The Group once again performed well in the first half of 2005. Revenue grew at 14.5% at actual exchange rates and 15.7% at constant exchange rates. Organic revenue growth was 13.2% and all four divisions achieved organic revenue growth in excess of 10%. Profit before tax at £38.5m was up 4.3% and adjusted EPS was up 14.0%.
We are confident that we are well placed to be able to continue to capitalise on the strong drivers in our business.
In consideration of our confidence in the future prospects for the group, we have declared an interim dividend of 3.9p, an increase of 14.7% over last year.
ANALYSTS’ MEETING
There will be a meeting for analysts at 9.30am today at Goldman Sachs International, Peterborough Court, 133 Fleet Street, London EC4A 2BB. A copy of the presentation will be available on the website later today.
For further information, please contact
Aston Swift, Treasurer and Investor Relations
Telephone: +44 (0) 20 7396 3400 aston.swift@intertek.com
Tim Lynch, Tulchan Communications
Telephone: +44 (0) 20 7353 4200 intertekteam@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 certifies the management systems of customers. Intertek has 307 laboratories and over 14,500 people around the world and is increasingly undertaking outsourced testing work for its customers.
Chairman's statement
Results overview
On behalf of the Board, I am pleased to announce a very good result for the first half of 2005, with each division reporting organic revenue growth of over 10%. At constant exchange rates, revenue for the Group increased 15.7% and operating profit before amortisation of intangibles and goodwill impairment increased 13.3%. On an organic basis, revenue grew 13.2% and operating profit grew 9.1%, before the share option charges required under IFRS. Approximately 80% of the Group’s earnings are in US dollars or related currencies. At actual exchange rates, revenue increased 14.5% and operating profit increased 11.5% over the same period last year, reflecting a 3% weakening in the value of the US dollar against sterling.
New business
The Group continued its policy of making acquisitions to complement existing businesses. On 29 April 2005, we acquired Omega Point Laboratories Inc (OPL), a fire testing laboratory in Texas, USA, for £2.5m. As announced on 3 August 2005, we also acquired PARC Technical Services Inc (PARC), a US petroleum and chemical process testing company for £3.9m.
Further acquisitions are being pursued.
Dividends
The Board has decided to pay, on 15 November 2005, an interim dividend of 3.9p (2004: 3.4p), an increase of 14.7% over last year. The interim dividend will paid to members on the register at 4 November 2005. In accordance with International Accounting Standard 10, dividends payable are no longer accrued but are recognised when they are paid.
Accounting standards
To date, the Group has prepared its accounts in compliance with UK Generally Accepted Accounting Principles (UK GAAP). European Union (EU) regulations require the Group to adopt International Financial Reporting Standards (IFRS) and International Accounting Standards (IAS) in its financial statements from 2005. IFRS and IAS have been applied to the Group’s consolidated interim financial statements from 1 January 2005 and the 2004 comparatives have been restated where applicable. The adoption of international standards has some impact on the presentation of our financial statements but does not fundamentally change our strategy, business and economic risks, financial position or our cash flows. A reconciliation of the impact on the income statement is given in note 14 to the interim report and full disclosure of the balance sheet impact is given in Appendix A. The policies adopted by the Group are detailed in Appendix B.
Looking ahead
Once again we expect another good outcome for the year. We feel confident in the continuing organic growth of the business, in the Group's ability to acquire and integrate acquisitions and to continue its progressive dividend policy.
Vanni Treves
Chairman