Intertek to pay dividend after revenue falls

Intertek said it would pay its final dividend as the company reported a 4.6% fall in revenue for the first four months of 2020.

Group revenue in the four months to the end of April fell to £882m as like-for-like revenue declined 4.9%, the FTSE 100 company said in a statement before its annual general meeting.

Intertek said its final dividend for 2019 of 71.6p a share, or £115m, would be paid in June after approval at the AGM.

The product testing company said it was too early to quantify the effect of the Covid-19 crisis on its business. But Chief Executive André Lacroix said the pandemic was likely to create opportunities.

"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," Lacroix said. "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."

On the company's dividend, Lacroix said: "The group operates a progressive dividend policy with a targeted payout ratio of circa 50%. Intertek ranks second highest in the FTSE100 in terms of dividend progression since the IPO in 2002. The 2019 dividend is 105.8p … and we will pay our final dividend of 71.6p or £115m on 11 June 2020."

At the end of 2019 the group had net debt of £629m which was one times earnings, down from 1.4 times earnings a year earlier. Intertek had undrawn borrowing facilities of £325m at the end of December and has qualified for the Bank of England's offer to buy short-term corporate debt if necessary, it said.

The company said it expected net debt at the end of 2020 to be between £650m and £700m. Capital spending during the year will be £90m-£100m, it said.