Intertek Group plc (LON:ITRK), a leading Total Quality Assurance provider to industries worldwide, today released its May Trading Update for the period from 1 January to 30 April 2020. All comparative comments in this statement reflect comparisons with the corresponding period during 2019. The Group’s half year results to 30 June 2020 will be announced on 31 July 2020.
WELL POSITIONED TO NAVIGATE AN UNPRECEDENTED PANDEMIC
● Responsive to a fast changing environment with organisational focus on employee safety, customer service, cost control, cash generation and employee engagement.
● Uninterrupted customer service to keep the supply chains of our clients operating safely and launch of industry-leading innovations to meet the emerging needs of our customers.
● Resilient trading performance with Revenue of £882m, down 4.6% year-on-year (“YoY”) both at constant and actual rates, with Like-for-Like (“LfL”) revenue down 4.9% YoY at constant currency: Product -6.6%, Trade -5.9%, Resources +2.4%.
● Well diversified revenue streams, high-margin, strong cash generative earnings model with a track record of sustainable value creation and a strong balance sheet with year-end net financial debt currently expected to be in the range of £650-700m.
● Well positioned to benefit from the increased needs of employees, consumers and governments for Health, Safety and Wellbeing Assurance solutions, creating additional growth opportunity in the attractive Global Quality Assurance market.
André Lacroix: Chief Executive Officer statement
“Intertek’s high quality business model operates across multiple sectors of the economy and we have provided uninterrupted customer service to our 300,000+ clients, ensuring the safe operation of their supply chains around the world, which is mission-critical for them. Our high quality earnings model, with its diversified revenue streams and focus on high margins, results in strong cash generation and a robust balance sheet, all underpinned by a disciplined approach to performance management. The Group operates a progressive dividend policy with a targeted payout ratio of circa 50%. The 2019 final dividend of 71.6p or £115m will be paid on 11 June 2020.
Our resilient trading performance over the first four months of 2020 reflects the defensive strengths of our business model. Revenue of £882m was down 4.6% year-on-year at actual rates and constant rates with a LfL revenue performance down 4.9% YoY at constant currency.
Notwithstanding the impact of the pandemic, I am confident in our ability to navigate what will be a challenging 2020. We have responded quickly to the global changes seen since January 2020 and have put in place the right measures on health and safety, customer service, cost controls, cash management and employee engagement. Nevertheless, it is too early to quantify the impact of Covid-19 and we will provide an update on our full year guidance once we have more visibility on how and when current lockdown restrictions around the world will be lifted.
The exciting structural growth drivers in the $250bn Global Quality Assurance Market pre-Covid-19 have now been joined by a wide array of new opportunities in many areas. These range from health, safety and wellbeing-oriented Quality Assurance in the workplace, public spaces and the home, to the growing demand in the healthcare sector for PPE, new medical devices and stronger infrastructure. Further, we are seeing the increasing need for risk management across supply chains and more robust protection against online piracy and other cyber threats in a connected world.
A recent example of this is the launch of our truly pioneering new innovation called Protek, the world’s first systemic, end-to-end Health, Safety and Wellness audit, inspection and certification assurance program for people, at work in public spaces and at home. www.intertek.com/protek
We are a strong company with more than 130 years of experience, driven by a clear purpose with a committed management team to seize the attractive structural growth opportunities ahead as Quality, Safety and Sustainability become ever more important to society. Intertek’s purpose is to make the world a better and safer place. Never has our purpose been more relevant than now.”
4 months – January to April
|2020 £m||2019 £m||Change at actual||Change at constant||Like-for-Like at constant 1|
Note 1: Like-for-Like revenue includes acquisitions following their 12 month anniversary of ownership and excludes the historical contribution of any business disposals and closures.