LONDON (Alliance News) - Safety-testing firm Intertek PLC hiked its 2018 dividend by two fifths on Tuesday after profit growth surpassed analyst expectations and it continues to expect "good" growth in 2019.
In 2018, pretax profit widened 2.8% to GBP404.5 million from GBP393.3 million the year prior. This was after revenue rose 1.1% to GBP2.80 billion from GBP2.77 billion in 2017.
Profit performance was hurt by a rise in exceptional costs of GBP52.0 million in 2018, up from GBP45.5 million the year prior. This was primarily due to a rise in acquisition charges to GBP33.1 million from GBP19.2 million.
In August, Intertek acquired US-based training software firm Alchemy Investment Holdings Inc for USD480 million.
On an adjusted basis - excluding exceptional costs - pretax profit widened 4.0% to GBP456.5 million from GBP438.8 million in 2017.
Overall, profit was slightly ahead of analyst expectations despite a modest disappointment to revenue forecasts. According to company-compiled consensus figures, the market expected adjusted pretax profit of GBP455 million on revenue of GBP2.81 billion.
"Intertek is going from strength to strength, making consistent progress on strategy and performance," Intertek Chief Executive Officer Andre Lacroix said. "We are benefiting from higher demand from our customers for our global Total Quality Assurance solutions in our Products, Trade and Resources divisions."
Intertek proposed a 67.2 pence final dividend per share, up 41% from 47.8p the year prior. For the full year, the dividend rose 39% to 99.1p from 71.3p the year before.
The significant hike was in line with the new dividend policy at Intertek which targets a payout ratio of around 50% or earnings.
"In 2018, we have seen revenue growth acceleration with 3.7% organic revenue growth at constant rates with continuing robust performance in our Products division, solid performance in Trade and a performance improvement in Resources," Lacroix added. "Our recent acquisitions in high margin and high growth areas performed well."
Adjusted operating margin in 2018 hit a "record" 17.2%, this is compared to the 16.8% reported in 2017.
"We expect to deliver good organic revenue growth performance at constant currency in 2019, with moderate group margin expansion and strong cash generation," Lacroix concluded.
Shares in Intertek were 3.2% lower at 5,024.00 pence on Tuesday in London.
Intertek Group (ITRK)