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Intertek full-year profit rises, dividend lifted
Inspection, product testing and certification company Intertek posted a jump in full-year pre-tax profit on Tuesday as revenue grew and it lifted its dividend.
Pre-tax profit for 2017 was up 13.3% to £438.8m on revenue of £2.8bn, up 8% on the previous year. Operating profit grew 14.2% to £467.7m and the dividend per share was increased to 71.3p from 62.4p the year before.
The company's adjusted operating margin came in at a record 16.9%, up 110 basis points at constant currency rates and 90 basis points at actual rates.
Chief executive officer Andre Lacroix said: "The group has delivered continued progress in revenue, margin and free cash flow in 2017, reflecting the group's performance management discipline focused on margin accretive revenue growth and cash conversion to generate strong returns for our shareholders.
"In recognition of our highly cash generative business 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 50% of earnings from 2018."
The products and trade related divisions, which represent 94% of Intertek's earnings, delivered an "excellent" performance, with organic revenue growth of 4.8% at constant currency, while trading conditions in the resources related division remained "challenging" as expected, hit by difficult conditions in the oil and gas infrastructure market.