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(Alliance News) - Intertek Group PLC on Tuesday said it is strongly positioned for growth going forward, despite weak performance so far in 2020.
The London-based assurance, inspection, product testing and certification company said revenue rebounded in the July-October period in Products & Trade in all regions, while trading conditions remain challenging in the Resources sector.
Revenue for the four months to the end of October declined by 9.9% to GBP941.0 million from GBP1.05 billion. On a constant currency basis, it fell by 6.2%.
For the first ten months of 2020, revenue decreased by 8.7% year-on-year to GBP2.27 billion. On a constant currency basis, it was 7.2% lower on the prior year.
Like-for-like revenue was down 10% and 8.8% in the four and 10 months to the end of October, respectively.
"We are making good progress on margin, based on productivity gains resulting from sequential revenue increases and our disciplined approach to performance management," said Chief Executive Andre Lacroix.
"Our operational focus on cash is delivering strong free cash flow and we continue to take a disciplined approach to capital allocation, investing in high growth and high margin sectors, as well as implementing our progressive dividend policy," added Lacroix.
Going forward, Intertek said, in 2020, it expects to deliver a mid-single digit decline in like-for-like revenue at constant currency in its Products, Resources and Trade division.
In the last four months, Intertek's Products business delivered a like-for-like revenue decline of 4.0% at constant rates, an improvement compared to the like-for-like revenue decline of 12% in the May-June period, resulting in a year-to-date like-for-like revenue decline of 6.8%.
The revenue momentum improvement in the last four months was driven by a rebound in activities across most of the company's business lines: Softlines, Hardlines, Electrical & Connected World, Business Assurance, Food and Chemicals & Pharma.
Turning to Resources unit, Intertek said, over the last four months, its Resources business delivered a like-for-like revenue decline of 9.6% at constant rates, broadly in-line with the like-for-like revenue decline of 11% in the May-June period, resulting in a year-to-date like-for-like revenue decline of 5.2%.
In the four months to October, Intertek's Trade business delivered a like-for-like revenue decline of 10% at constant rates, an improvement compared to the like-for-like revenue decline of 18% in the May-June period, resulting in a year-to-date like-for-like decline in revenue of 10%.
This improvement in revenue momentum in the last four months was driven by a rebound in activities in Caleb Brett and AgriWorld.
"In short, the pandemic has brought to life as never before the importance of Intertek's purpose-led role in society," concluded Lacroix.
Intertek shares were trading 6.4% lower in London on Tuesday at 5,686.00 pence each, making it the worst performer in the FTSE 100 index.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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