Intertek FY profits grow on improved revenues

Laboratory testing group Intertek said on Tuesday that profits had grown in 2023, driven by improved full-year revenues and margins.

Intertek said total revenues were up 4.3% to £3.3bn, while like-for-like revenues were 6.2% higher at constant currency rates, pushing adjusted operating profits up 10.9% to £551.1m. Pre-tax profits were up from £488.2m a year ago at £507.2m in 2023 and adjusted diluted earnings per share rose to 223.1p from 211.1p in 2022.

Adjusted operating margins came to 16.6%, up 60 basis points at constant currency and 30bps at actual rates, while return on invested capital rose to 20.5%, up 250bps year-on-year at constant currency and at actual rates.

The FTSE 100-listed business also said it intends to return roughly 505 of adjusted profit to shareholders, promising to pay a full-year dividend of 111.7p at a total cost of £181.2m.

Chief executive André Lacroix said: "Based on our positive momentum, we expect the group will deliver a robust performance in 2024 with mid-single digit LFL revenue growth at constant currency, margin progression and a strong cash flow performance. We are on track to get back to our peak margin of 17.5% and beyond in the medium term, capitalising on the revenue growth acceleration we are seeing for our ATIC solutions, our disciplined performance management and our investments in high growth and high-margin segments.

"We believe in the value of accretive disciplined capital allocation. In recognition of our highly cash-generative earnings model, our strong financial position, the board's confidence in the attractive long-term growth prospects for the group and its ability to fund continued growth investments, we are increasing our targeted dividend payout ratio to circa 65% of earnings from 2024."

As of 0910 GMT, Intertek shares were up 6.34% at 4,914.0p.

Reporting by Iain Gilbert at Sharecast.com