Trading Statement
Intertek Group PLC
14 December 2005
14 December 2005, 7am (UK)
Intertek Group plc ('Intertek')
Trading Statement
Intertek, the global testing, inspection and certification company, today
reports on trading ahead of entering the close period for the financial year to
31 December 2005. The preliminary results will be announced on Monday 6 March
2006 and the close period commences on 6 January 2006.
Labtest, the consumer goods division, continues to perform well despite the
competitive environment in inspection and the second half impact of the Chinese
textile export quotas to Europe and the US reaching their limits in the summer
of 2005. The operating margin for the second half is expected to be stable and
similar to the first half of 2005. Labtest has strengthened its position in
consultancy and testing relating to the new European directive on the
restriction of hazardous substances (RoHS). This and other services from Labtest
will drive strong performance next year and beyond.
ETL SEMKO, the commercial and electrical consumer products division, continues
to perform very strongly in all regions with an expected acceleration of organic
growth compared to last year. Asia, and especially China, is experiencing the
fastest growth helped by the increasing acceptance of the ETL label by North
American retailers. Testing and certification in the Americas and Europe across
all activities are showing good growth, with market share gains in some sectors.
The operating margin is expected to be higher than last year despite the
incremental cost of investments in the automotive and building products testing
businesses in China and a new testing laboratory in India.
Caleb Brett, the oil, chemical and agricultural division, is achieving excellent
growth with an expected acceleration of organic growth compared to last year.
The increasing provision of services to the upstream exploration industry is
leading to higher growth potential and margins in Caleb Brett. The revenue
growth of Analytical Services is particularly strong as a result of a steady
increase in new business. This trend is expected to continue into 2006 following
the recent acquisitions of Westport, Automotive Research and Lintec and the new
outsourcing agreement with Kodak.
The trading conditions experienced by Caleb Brett in the second half of 2005
were significantly impacted by Hurricanes Katrina and Rita and their aftermath.
These effects include lost revenue due to diminished oil and gas production in
the Gulf of Mexico and it is currently expected that reported operating profits
will be reduced by approximately £2 million to £3 million as a result of the
hurricanes. These estimates do not take into account any insurance recoveries,
which while probable, are likely to take some time to process.
FTS, the trade services division, is expected to report revenue ahead of last
year despite a fall in monthly revenues from September onwards due to the ending
of the Venezuela contract. The new Standards contract with Kenya will partly
compensate for the ending of the Venezuela contract and all costs of
demobilising were included in the results for the half year 2005.
Group
Overall, revenues and underlying operating profit for 2005 are expected to come
close to the top end of expectations.
The cost of litigation related to old legal claims has been unusually high in
the second half of 2005. One claim in Caleb Brett, dating back to 1996, was
contested in court and unexpectedly resulted in an adverse judgment, which has
been appealed.
Taking into account the impact of the hurricanes and the unexpected cost of the
claim, and excluding likely insurance recoveries, the reported operating profit
is expected to come in towards the lower end of expectations.
The three year decline of the US dollar against sterling has recently abated and
this should have a very minor but favourable effect on the reported results as
approximately 80% of the Group's earnings are in US dollar or currencies related
to the US dollar.
Wolfhart Hauser, Chief Executive, said 'We are pleased with the underlying
performance this year across the Group. By continuing to pursue the Group's
strategy of creating added value for our customers through technical services
that support them in their global trade, Intertek aims to generate high organic
growth rates. Acquisitions and greenfield investments will continue to be made
to support this strategy and the recent series of successful acquisitions and
investments demonstrates Intertek's ability to carry this out.'
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 over 300 laboratories and over
14,500 people around the world and is increasingly undertaking outsourced
testing work for its customers.
This information is provided by RNS
The company news service from the London Stock Exchange
Latest directors dealings
- 7 minutes ago Frasers Group
- 7 minutes ago Cavendish Financial
- 7 minutes ago Diaceutics
- 7 minutes ago AB Dynamics
- 13 hours ago Johnson Matthey