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Tuesday newspaper share tips: Intertek, De la Rue

Tue, 02nd Aug 2016 15:13

(ShareCast News) - Shares in Intertek have rocketed since their flotation in 2002 despite which they remain relatively unknown to most investors. Nonetheless, while growth prospects for the testing, inspecting and certification outfit are still good, the shares are best avoided, The Times´s Tempus said.Indeed, take out the benefits from acquistions and sales at its resources divisions - which accounted for one sixth of of profits during the boom years - dropped 11% at the half-year stage.However, profits at the products division galloped ahead by 22%.On the company boss´s Andre Lacroix´s estimates, just $50bn of the testing specialist´s $250bn market had been outsourced.Lacroix also held that the company´s scale gave it an advantage when negotiating with the largest firms and helps provide it with the firepower necessary to continue innovating.Even so, "this business is riskier than it looks", so 'hold' Tempus said. Financial Times' Lex column is backing cash to come good for banknote producer De La Rue.The company makes cash for clients such as the Bank of England yet experienced troubles in 2014 resulting in mixed results and a tumbling share price.De La Rue went through somewhat of an overhaul around that time, with Martin Sutherland taking over as chief executive, after selling his own cash processing business in May of that year.Around 6bn banknotes are typically printed per year by the company to distribute to banks, significantly less than before Sutherland took over two years ago, but more in line with current demand.Citigroup estimates that this consolidation will generate an extra £40m in savings over the next three years.Despite many predictions that cash itself is on the way out as banks and companies move towards more digitised methods for transactions, Lex believes that this will not be the case any time soon.Before the British referendum on its membership of the European Union, the European Central Bank reported that demand for cash was growing by at least 5% per year in most of Europe.De La Rue also prints passports, and reports suggest that sales could be boosted by as much as £200m.Shares in the company have risen by 40% this year already.The market signs are good, and may well show De La Rue investors coming away with more of the very product it produces, Lex concluded.

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