Intertek revenue up but resource business challenging

FTSE 100 testing, inspection and certification company Intertek Group reported a rise in revenue for the first four months of the year although its resource-related business continued to suffer from challenging markets.

In a trading update for the period from 1 January to 30 April, the group said revenue rose 12.7% to £774m at actual exchange rates and 10.6% at constant currency.

Meanwhile, organic revenue was up 2.3% at actual rates and 0.5% at constant currency.

Chief executive Andre Lacroix said: “Our Product related businesses, which contribute over two-thirds of our earnings, delivered good organic growth performance, our Trade activities reported solid organic growth while market conditions remained challenging in our Resource related businesses.

“We are on track to deliver robust full year revenue growth at constant currency. As stated at our full year results presentation in March, we continue to expect to deliver solid organic growth performance in 2016 with group margins broadly stable year on year.”

The company noted it has made five acquisitions since January 2015, which have allowed it to take advantage of growth opportunities in business lines with attractive margins that have delivered a good performance.

In addition, Intertek said the recently acquired PSI and MT businesses afford it access to the rapidly growing US commercial and civil construction markets.

Shore Capital, which rates the stock at ‘sell’, said the statement revealed “a positive start to the year for Intertek, with positive momentum manifesting with 2.3% organic growth at the top end of the 1-2% range of the global testing, inspection and certification peers”.

At 0805 BST, Intertek shares were down 1.5% to 3,248p.