Intertek shares rise on acquisition news and upbeat half-year results

Monday, Aug 01 2011 by
Intertek shares rise on acquisition news and upbeat halfyear results

Intertek (LON:ITRK) , the FTSE 100 quality and safety services group, has announced a clutch of acquisitions and a robust set of half year results which together helped drive up its shares by nearly 5.5 percent to 2019p during morning trading. It is paying around £11.5 million for three businesses, including Food Analytical Laboratory Ltd, Recherche, Developpement & Consulting - Bruxelles SA and QinetiQ’s (LON:QQ.) UK Fuel and Lubricants Testing Business. It said the deals represented further progress in its strategy to add new expertise and capabilities across the supply chain in order to meet customer demand.

In its results, Intertek, whose services span auditing, inspection, testing, quality assurance and certification, said that revenues in the first six months had grown by 17 percent to £763 million; including constant currency organic growth of 8.3 percent. Pre-tax profits grew by 14 percent to £110.6 million and the interim dividend was increased by 15 percent to 10.7p per share. Elsewhere, Intertek said that the integration of Moody International, the energy consultancy that it paid £450 million for in March, was delivering savings ahead of schedule. It also said that it was restructuring its finance and IT functions to save £10 million per year by 2014.

Among the acquisitions, the group is paying £6 million for Food Analytical Laboratory Ltd, which is a food testing laboratory that provides chemical and microbiological services for food producers in the UK. It will now form part of Intertek’s Industry & Assurance division, adding its laboratory to the division’s existing Food & Agri auditing, food regulatory and advisory services.

Recherche, Developpement & Consulting - Bruxelles SA specialises in environmental impact consulting for consumer products industries. The Brussels-based company was purchased for approximately £5 million and brings highly complementary expertise to Intertek clients seeking to reduce their product packaging, organisation and overall supply chain environmental impact. It will form part of the Consumer Goods division.

Finally, the QinetiQ UK Fuel and Lubricants Testing Business (OALTB), a fuel and lubricant analysis and consulting business in the UK, has been acquired QinetiQ for £0.5 million. Intertek said the business would enhance its expert testing capabilities in the energy and transport sector, whilst adding incremental sales volumes to the group’s existing fuel and lubricants testing services in the UK and overseas. It will form part of Intertek’s Chemicals & Pharmaceuticals division.

Wolfhart Hauser, Intertek’s chief executive, said: “These three acquisitions demonstrate Intertek’s progress in its strategy to add new expertise and capabilities across the supply chain in areas where our clients’ development of new technologies and operations demand them. FAL will bring new expertise to Intertek and provide a UK-based food testing laboratory to complement the existing food services business. RDC will help position Intertek at the forefront of European clients’ needs in environmental sustainability assessment, and OALTB will increase Intertek’s reach in the fuel and lubricant testing markets.”

“Intertek has delivered strong growth, successfully completed the strategic acquisition of Moody International and invested for future profit growth in the first half of the year. Moody is performing very well, benefiting from structural recovery, rapid integration with the Intertek service and customer portfolio and achieving planned cost reductions ahead of schedule. For the two months post completion, pro forma revenue growth was 13 percent on an operating profit margin of 13 percent. Our businesses continue to perform well overall, with strength in some areas offsetting slower growth in others. Commodities, Commercial & Electrical and the recently acquired Moody business are expected to continue to grow very well in the second half of the year. Consumer Goods is expected to make progress from the slower growth in the first half with its long term growth drivers remaining in place. Whilst we are mindful of the uncertain economic conditions, we expect to grow revenue at high single digits on an organic constant currency basis for the full year with a margin close to that of the prior year.”


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Intertek Group PLC is a United Kingdom-based company, which offers quality assurance services. The Company's segments include Products, Trade and Resources. The Products-related division consists of business lines that are focused on ensuring the quality and safety of physical components and products, as well minimizing risk through assessing the operating process and quality management systems of its customers. The Trade division consists of three business lines: Cargo & Analytical Assessment business, which provides cargo inspection, analytical assessment, calibration and related research and technical services; Government & Trade Services business, which provides inspection services to governments and regulatory bodies to support trade activities, and Agriculture business, which provides analytical and testing services to global agricultural trading companies and growers. Resources division consists of two business lines: Industry Services business and Minerals business. more »

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QinetiQ Group plc is a science and engineering company operating in the defense, security and aerospace markets. The Company's segments include EMEA Services and Global Products. The EMEA Services segment provides technical assurance, test and evaluation, and training services. It provides research and advice in specialist areas, such as concept of command, control, communications, computers, intelligence, surveillance and reconnaissance, weapons and energetics, cyber security and procurement advisory services. The Global Products segment delivers solutions and undertakes contract-funded research and development, developing intellectual property in partnership with customers and through internal funding. It offers advice, services and technology-based products. Its customers include government organizations, including defense departments, as well as international customers. The Company operates in Australia, Belgium, Canada, Sweden, the United Arab Emirates and the United States. more »

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